Goldman Sachs maintained a Neutral rating on Perrigo Co. (NYSE: PRGO) with a price target of $145. Earlier Perrigo reported Q1 results and announced a deal to acquire Omega. In the view of analyst Jami Rubin, Omega is a good strategic fit, but he noted Q1 was another weak quarter.

"While we don’t take a view on the likelihood of the deal closing, strategically we think the deal makes sense and as it would provide PRGO with the geographic expansion management has previously expressed interest in. The deal is targeted to close during 1QCY15. PRGO expects the deal to be immediately accretive to adjusted EPS and double-digit accretion in FY2016. It also expects revenue synergies to come from the ability to sell PRGO products in new channels, overseas, where PRGO previously had little exposure. We analyzed a range of revenue and cost synergies (based on similar deals) around PRGOs forecast range and debt scenarios. Our analysis suggests PRGO can achieve its targeted >10% accretion in FY16 if it could deliver ~15% revenue+cost synergies," said Rubin.

"Separately, PRGO reported another weak quarter. Adjusted EPS for 1QFY was $1.40, compared to GS/consensus of $1.44. Revenues of $952 mn also missed our estimate of $992 mn and consensus of $997 mn. The revenue miss came across segments. On the positive side, PRGO announced shipments have been reinitiated for Mucinex 600 mg, which is not in our numbers for FY2015 or in PRGO’s FY2015 guidance, but now appears to be a plug, not a source of upside. The announced Omega deal and positive Mucinex news will likely offset the negative sentiment from another missed quarter. However we believe this will continue to shift the discussion with investors from organic growth to deals, potentially further challenging multiple expansion in a stock that has continued to struggle in the face of missed quarters," added the analyst.

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Shares of Perrigo Co. closed at $158.50 yesterday.