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Perrigo Co PLC PRGO

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Perrigo Unloads Its Generic Business and Reports Softness in Its Fourth Quarter

Soo Romanoff Equity Analyst

Analyst Note

| Soo Romanoff |

No-moat Perrigo reported another quarter with the usual (significant) puts and takes complicated by the announced divestiture of its prescription business further muddied by the pandemic. Management has been active in the M&A market to better configure and manage its offerings across segments. The announced sale of its prescription business will provide the company with approximately $1.55 billion in gross proceeds that will likely aid in funding incremental acquisitions to expand its consumer self-care focus. We do not foresee a significant change in our fair value estimate of $40 per share.

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Company Profile

Business Description

Perrigo is the leading provider of over-the-counter generic drugs with over 100 global locations. The company was formed in 1887 as a packager of home remedies and has grown with the migration of prescriptions switching to OTC and later with strategic acquisitions. The company has a portfolio of more than 3,000 product formulations and 14,000 stock-keeping units. Most of its manufacturing and customer base reside in North America. With the most recent management change, the company announced a narrower focus on consumer wellness in conjunction with the divestiture of animal health, acquisition of Ranir Global Holdings, and plans to sell or spin off the prescription business.

Contact
The Sharp Building, Hogan Place
Dublin, D02 TY74, Ireland
T +353 17094000
Sector Healthcare
Industry Drug Manufacturers - Specialty & Generic
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 11,500

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