After rating PRGO a sell in Feb. now raising rating to neutral! What a joke!! Goldman does understand Perrigo's business as they have had analysist on the company in the past and I believe made a market in the stock. Talk about knee jerk reactions....
Goldman just does not understand PRGOs model and puts too much emphasis on parts of the PRGO business that are not core. Here was the excerpt (you may have already seen).
In the report, Goldman Sachs states, "PRGO reported F2Q EPS ahead of GS and consensus on solid Rx and API performance, offsetting a Consumer segment that was again soft. While today's results were solid and indicative of still-consistent execution, we highlight increasing gross profit dependence on generics, particularly on the heels of the recent Paddock acquisition, with organic growth in the core Consumer business coming in below expectations. Nonetheless, numbers are likely to go higher, in part on raised guidance, despite what we continue to see as ongoing headwinds in Consumer offsetting temporary gains from competitor recalls."
My comment: Goldman is in bed with J&J and will not be supporting PRGO....Goldman Sachs has provided financial advice on J&J’s two biggest deals -- the $16.6 billion purchase of Pfizer Inc.’s consumer health-care unit in 2006, and the $12.9 billion takeover of Alza Corp. in 2001, Bloomberg data show. Smith & Nephew used UBS AG as its financial adviser in its $883 million deal for Plus Orthopedics Holding AG in 2007.
Separately, analysts at Zacks Investment Research upgraded shares of Perrigo from a “neutral” rating to an “outperform” rating in a research note to investors on Monday. They now have a $87.00 price target on the stock.
(Like I said in a previous post - I would expect PRGO to settle back in at 68-69, consolidate...and then make a run to 80 in the next 3-6 months.)