In a report released yesterday, Susan Anderson from Canaccord Genuity maintained a Buy rating on Perrigo Company (PRGO – Research Report), with a price target of $49.00.
Susan Anderson has given her Buy rating to Perrigo Company’s stock due to a combination of factors. Despite missing sales estimates in Q3 2023, Perrigo had better-than-expected margins, with adjusted EBIT and EPS also exceeding estimates. Anderson notes that Perrigo is making margin improvements through SKU rationalization and supply chain reinvention programs. Additionally, she believes that the company’s first-mover advantage with OTC oral contraceptive brand Opill, set to launch in the first quarter of 2024, can provide additional long-term upside.
Furthermore, she mentions the potential for more value to be unlocked under the new CEO, Lockwood-Taylor, who plans to standardize and scale operations. Anderson emphasizes Perrigo’s attractive valuation, trading at under 10 times FY24 earnings, and the company’s ability to drive sales growth over the long term. Despite top-line headwinds, the company’s margins exceeded expectations due to SKU rationalization and a shift to higher-margin products. Finally, the forthcoming launch of Opill, the first OTC oral contraceptive, is expected to be accretive in the long run despite initial dilution.
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Perrigo Company (PRGO) Company Description:
Perrigo Co. Plc is a healthcare company, which engages in the production of over-the-counter consumer goods and specialty pharmaceutical products. It operates through the following segments: Consumer Healthcare Americas, Consumer Healthcare International, and Prescription Pharmaceuticals. The Consumer Healthcare Americas segment comprises the U.S., Mexico and Canada consumer healthcare business. The Consumer Healthcare International segment includes branded consumer healthcare business primarily in Europe and consumer focused businesses in the U.K., Australia, and Israel. The Prescription Pharmaceuticals refers to the U.S. prescription pharmaceuticals business. The company was founded by Luther Perrigo in 1887 and is headquartered in Dublin, Ireland.
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