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Perrigo Co PLC - Stock Quote PRGO

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Morningstar's Perrigo Co PLC Stock Analysis

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Perrigo Reports Solid First-Quarter Results; Raises Guidance Following HRA Pharma Closing

Dylan Finley, CFA Equity Analyst

Analyst Note

| Dylan Finley, CFA |

Due to the earlier-than-expected close of the HRA Pharma deal, Perrigo raised its top- and bottom-line guidance estimates for 2022. As the deal is accretive to the company's operating margin, the result of closing two months prior to both management's (and our own) expectations results in a $0.35 boon to EPS for fiscal year 2022. These tailwinds were partially offset by higher-than-anticipated operating costs and disruption in the company's sales in Eastern Europe. The market reacted positively to the news; however, we are maintaining our fair value estimate of $47.50 as we do not see any of the short-term changes to be material to our long-term growth and margin assumptions. Our long-term thesis also remains steady for the no-moat company. Even with the combination of HRA's assets, we do not see any branded products in the company's portfolio that possess substantial enough brand equity to command pricing power in the market. Regarding current operations, the company's first-quarter results were within our expectations, and we do not anticipate any change to organic growth for the year. 

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Perrigo Co PLC's Company Profile

Business Description

Perrigo Co PLC is a leading private label supplier of generic over the counter (OTC) drugs in the U.S. and Europe. The company's product offerings fall under traditional OTC drug categories (i.e. cough, cold, allergy, pain), in addition to oral care, infant nutrition (formula), and nicotine cessation aids. In addition to private label manufacturing, the company also sells products under its own brands (largely in the skincare and oral-care category). The company became a pure-play in OTC consumer healthcare in 2021, following a series of divestitures over several years (sold off generic prescription topicals, animal health, and active pharmaceutical ingredient business). In late 2021, Perrigo signed an offer to acquire HRA Pharma.

The Sharp Building, Hogan Place
Dublin, D02 TY74, Ireland
T +353 17094000
Sector Healthcare
Industry Drug Manufacturers - Specialty & Generic
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 9,900

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