Perrigo receives a 14% offside recommendation – the capital market

Leumi Partners recommends the pharmaceutical company

Perrigo
+ 0.14%

Base:14,180

opening:13,990

High:14,200

low:13,800

change:16,824,721

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, Following the sale of the pharmaceutical division Generic RX for $ 1.55 billion, of which the company will receive $ 1.5 billion in cash. (To the full article). The deal actually reflects the sale of the historic Agis company that was acquired by Perrigo 15 years ago and since then the company’s share has been traded in Israel. The question – will it continue when the company is sold to another entity and will the activity at all remain in the country?

Perigo’s revenue fell 2.5% in the last quarter from $ 1.323 billion in the last quarter of 2019, to $ 1.29 billion in the last quarter of 2020. Gross profit totaled $ 469 million, compared to $ 481 million in the same period last year. A decrease of 2.4%.

Operating profit agreement at a loss of $ 52.3 million, compared to a loss of nearly $ 7 million. Or an increase of almost 670% in a row. The company also reported a loss of $ 175 million, compared to a loss of $ 19 million in the same period last year. The loss rose from 0.14 cents in the last quarter of 2019 to $ 1.29 per share.

Merav Fischer-Sharoni, senior analyst at Leumi Partners, responds to the publication of Perrigo’s results for 2020: “Perigo ended 2020 with a growth of about 5% in sales and a decrease in earnings per share – as we estimated in the past, a relatively weak fourth quarter ‘Very weak, brought Perrigo to a moderate end to 2020, even though the first half of the year was strong. Perrigo ended the year with sales of $ 5.1 billion and earnings per share of $ 4.02. Consumer goods and pharmaceuticals OTC contributed about 80% to sales “It grew annually by about 6%, of which organic growth of about 2%. Perigo has a significant foothold in online commerce, which received a windfall this year, as part of the effects of the corona plague, which is expected to support the company’s results in the future.”

Fischer-Sharoni adds that “at the same time as publishing the report, Perrigo announced the sale of the generic pharmaceutical business to ALTARIS for $ 1.55 billion, of which $ 1.5 billion in cash.

Bottom line Fisher-Sharoni notes that “we estimate that Perrigo will continue to show growth in activity, and a gradual improvement in profitability, resulting from acquired activity and organic efficiency. It is likely that after the prescription drug business Perrigo will” gain “a higher multiplier, which will In light of this, and in light of the gap between economic value and market value, we raise the investment recommendation to buy at a target price of $ 48 per share.We mention that Perrigo is still facing 2 tax claims amounting to close to $ 3 billion “In the United States and Ireland, the results of which are expected to become clear over the next two years.”