UPDATE: Bank of America Upgrades Perrigo

In a report published Tuesday, Bank of America Merrill Lynch analyst Gregg Gilbert upgraded Perrigo (NYSE: PRGO) to Buy from Neutral, raising its price objective to $171.00 from $162.00.

According to the report, PRGO is the leader in OTC store brands and a strong participant in generic topicals. The analysts continue to like the store brand theme and the long cash flow tail such products typically provide and PRGO's superior positioning in the space.

“With PRGO's acquisition of Elan now complete, the newly Irish-domiciled company is in a position to benefit from a more efficient tax structure, both on a stand-alone basis and in a merger and acquisition (M&A) context. With Elan came a royalty stream on the biotech drug Tysabri (treats multiple sclerosis; MS). We view this stream as “financially core” (helps tax rate and contributes strong EBITDA) but not “strategically core,” in that a royalty stream on a biotech product does not obviously fit with a business model based on store brands and generics.”

PRGO closed Monday at $152.93.