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- Perrigo (NYSE:PRGO) keeps rising in the pre-market with a ~14.5% gain after announcing that the company reached a settlement with Irish authorities for a tax dispute dating back to 2018.
- Noting that the deal has made the company’s near-term outlook for leverage less risky, Jefferies has upgraded the stock to buy from neutral. The price target raised to $63 per share implies a premium of ~44.8% to the last close.
- “The full and final settlement is for ~$309M, which is dramatically lower than the 2018 ~$1.9B headline figure,” the analysts wrote referring to the back taxes demanded by Irish authorities in the dispute over the sale of the Tysabri patents.
- The company’s recent decision to acquire HRA Pharma has become another reason for the upgrade. Citing the management remarks over the earnings outlook for the OTC company, the analysts argue that the 2023 adjusted earnings estimate for Perrigo (PRGO) should be nearly 25% higher than its previous estimates.
- Early this month, Perrigo (PRGO) – headquartered in Dublin, Ireland – agreed to acquire HRA Pharma for €1.8B (nearly $2.1B).