Perrigo Company (PRGO) reported earnings per share of $1.10 for the first quarter of fiscal 2012, beating the Zacks Consensus Estimate of $1.03 and the year-earlier earnings of $0.87. Perrigo upped fiscal 2012 earnings per share outlook from $4.50-$4.65 to $4.65-$4.80 due to a strong pipeline and production efficiency gains. Revenue guidance was also increased.
We too increased our revenue and earnings estimates for fiscal 2012. We believe that Perrigo's strong position in the brand OTC pharmaceutical market and growing generics and API businesses combined with its strong and impressive pipeline can drive growth in fiscal 2012 and beyond.
We have thus upgraded our rating from Neutral to Outperform to reflect the company's better growth outlook for fiscal 2012. Over the last five years, Perrigo's shares have traded in a range of 11.8x to 29.3x trailing 12-month earnings. Our target price of $113 is based on 23.8 x our fiscal 2012 EPS estimate of $4.74.
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