Back to top

Analyst Blog

We continue to have a Neutral recommendation on Perrigo Company plc (PRGO - Analyst Report). Dublin, Ireland-based Perrigo Company plc was formed following the Dec 2013 merger of Allegan, MI-based Perrigo Company and Elan Corporation. The merged entity, with a diversified revenue stream, is a global healthcare company with an attractive growth profile.

Why the Reiteration?

On Oct 31, Perrigo reported higher-than-expected earnings and revenues in the first quarter of fiscal 2014 (ended Sep 28, 2013). Net sales in the quarter climbed 21.3% to $933.4 million. Revenues increased $64 million due to the inclusion of results of Sergeant's Pet Care Products, Inc. (assets acquired by Perrigo in Oct 2012), Rosemont Pharma (acquired by Perrigo in Feb 2013), Velcera (acquired in Apr 2013) and Fera’s ophthalmic product portfolio (acquired in Jun 2013). Newly launched products boosted revenues by $54 million.

This was the fifth straight earnings surprise delivered by the company. The acquisition of Elan, completed in Dec 2013 for approximately $8.6 billion, has boosted Perrigo’s revenue stream further as it is now eligible to receive significant royalties on multiple sclerosis drug Tysabri from Biogen Idec (BIIB - Analyst Report).

Moreover, Perrigo has reduced its tax liability by shifting its base to Ireland from the U.S. Through the deal, Perrigo expects to generate post-tax annual operating expense and tax savings in excess of $150 million. The acquisition has also expanded its geographic reach. The deal is expected to boost Perrigo’s adjusted earnings per share in fiscal 2014.

We expect investor focus to remain on the performance of the merged entity and hence retain our Neutral view on the stock. Our investment thesis is supported by a Zacks Rank #3 (Hold).

Other Stocks to Consider

Some better-ranked stocks include Jazz Pharmaceuticals (JAZZ - Analyst Report) and Forest Laboratories Inc. . Both the stocks carry a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%