UPDATE: Morgan Stanley Downgrades Perrigo Company to Equal-Weight After Shares Rally

Morgan Stanley cut its rating on Perrigo Company

from Overweight to Equal-weight and increased its price target from $110 to $125. Morgan Stanley noted, "PRGO trades at ~22x cons' NTM forward earnings vs. the 2-yr. avg. of ~19x (see chart–p. 3). The stock has outperformed in this “risk-off” market because PRGO offers defensive growth and limited exposure to European headwinds (a majority of sales and profits are generated in the U.S.). … We are rolling forward our PT from 20x our calendar ‘12E of $5.51 to 20.5x cal. ‘13E of $6.10 (fiscal yr. ends in June). We believe superior execution and potential to add new growth drivers in adjacent CHC categories (e.g., wound care, animal health) continue to justify PRGO's premium multiple." Perrigo Company closed at $118.32 on Thursday.