Guggenheim Cuts PT On Perrigo (PRGO) By 30%

Guggenheim analyst, Louise Chen, thinks Perrigo Co. (NYSE: PRGO) stock could experience downward pressure ahead of 1Q16 earnings but that earnings visibility going forward is likely to improve. Due to the executive departure, she cut her PT from $185 to $125 but maintained a Buy rating.

The company has named insider, John Hendrickson, as Papa's successor. Although this has raised some questions, on the surface, the analyst thinks naming a new CEO versus waiting to do a full search addresses some uncertainty facing the company. Also, providing preliminary 1Q16 and a '16 guidance update in light of the management change underscores PRGO's commitment to improve its communication with the Street.

PRGO noted that its guide down was preliminary and the books have not closed yet. Therefore, given several headwinds (generics, Omega and Tysabri) facing the company, we have conservatively lowered our '16 and '17 EPS estimates. The decrease was driven by lower sales and margins than we had previously forecasted. Despite a lack of new launches, on average, YOY Rx growth has been 6%.

For an analyst ratings summary and ratings history on Perrigo Co. click here. For more ratings news on Perrigo Co. click here.

Shares of Perrigo Co. closed at $99.55 yesterday.

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