Johnson & Johnson (JNJ) Woes Benefit Perrigo (PRGO)

Collins Stewart analysts Louise Chen and Swati Kumar reiterated their Buy rating and $73 price target for shares of Perrigo Company (NASDAQ: PRGO).

Chen and Kumar said that the recall of various infants' and children's products by Johnson & Johnson (NYSE: JNJ) will benefit Perrigo Company.

The analysts said that the recall would highlight Perrigo Company's capabilities as a trustworthy supplier during market disruptions.

The Collins Stewart analysts wrote, "on 5/1/10, JNJ announced that it is voluntarily recalling certain OTC infants' and children's products. The company is voluntarily recalling all lots that have not yet expired of certain OTC children’s and infants’ liquid products manufactured in the US and distributed throughout many parts of the world. JNJ is initiating this recall because some of the products may not meet required quality standards. The company is conducting a comprehensive quality assessment across its manufacturing operations and has identified corrective actions that will be implemented before new manufacturing is initiated at the plant where the recalled products were made."