Perrigo (PRGO): Takeout Value Is $153 - Guggenheim
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Guggenheim analyst, Louise Chen reiterated her Buy rating on shares of Perrigo Co. (NYSE: PRGO) after performing a Sum-of-the-Parts Analysis (SOTP) which suggests that PRGO shares are undervalued because clouds of uncertainty are masking the underlying growth potential of good assets (Consumer, Rx, Pipeline in '17+).
Management changes, several downward earnings revisions, generic drug pricing headwinds and a slowdown in Consumer launches this year have weighed on PRGO's stock through 1H16. PRGO shares are now down 37.8% YTD vs. +6.9% for the S&P500, and overall sentiment is negative on the stock. The analyst believes expectations have been reset and PRGO's risk/ reward is skewed to the upside.
As part of the analysis, Ms Chen, estimated PRGO's take-out value and derived $153 per share, 69% upside from where the stock is trading now. MYL was willing to pay ~$177 per share for PRGO's stock last year, she believes the fundamentals of the business have not deteriorated that much since then.
No change to the price target of $125.
Shares of Perrigo Co. closed at $91.83 yesterday.
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Related EntitiesStandard & Poor's, Earnings, Louise Chen, Guggenheim
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