Perrigo Co. (PRGO) has a return on equity (ROE) of 17%, more than the double the industry’s average of 8%. The company’s earnings per share are expected to grow by 21% over the next 3 – 5 years, while the industry average expectation stands at 15%.

Company Description

Perrigo is the nation’s largest manufacturer of store brand over-the-counter (non-prescription) pharmaceutical products and it manufactures store brand nutritional products. Store brand products are sold by national and regional supermarket, drugstore and mass merchandise chains under their own labels and compete with nationally advertised brands. The Company’s products include analgesics, cough and cold remedies, antacids, laxatives, feminine hygiene and smoking cessation products, and vitamins, nutritional supplements and nutritional drinks.

Recent Events

The company recently announced that it received final approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application (ANDA) for over-the-counter (OTC) Ibuprofen and Diphenhydramine Citrate Tablets Perrigo said it expects to begin product shipments to retailers during the first quarter of calendar year 2009.

Record Results

In early November, the company announced record fiscal first-quarter adjusted earnings of 41 cents per share, beatin the previous year’s 36 cents. Net sales jumped 25% year-over-year to $480.2 million.

Perrigo Chairman and CEO Joseph C. Papa stated, “Fiscal 2009 is off to the strong start we had anticipated. In the first quarter, we achieved both record sales and record earnings, with our new products contributing $71 million to top line growth. This past quarter, the over-the-counter (OTC) category grew more than 4% versus first quarter last year. In the same period, store brands grew nearly 13%. We believe that store brand offerings will continue to perform well as consumers realize the value of Perrigo’s product offering in this challenging economy.”

Street Estimates

Analyst earnings forecasts for the year ending June 2009 have held steady at $1.95 per share. For the following year, projections of $2.16 per share are up from $2.13 over the past month.

Industry Leading Fundamentals

Perrigo has a return on equity (ROE) of 17%, more than the double the industry’s average of 8%. The company’s earnings per share are expected to grow by 21% over the next 3 – 5 years, while the industry average expectation stands at 15%.

“PRGO” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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