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Perrigo Company plc (PRGO)
NYSE:PRGO
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Perrigo Company
(NYSE:PRGO)68Neutral
Positive Factors
Infant Nutrition Recovery
PRGO's infant nutrition business continued to recover, with infant formula sales up +17% YOY in 4Q, improving from around +3% YOY in 3Q.
Operational Efficiency
PRGO was able to leverage operating expenses by over +500 bps due to savings from Project Energize and lower variable expenses.
Negative Factors
Sales Performance
Sales were weaker due to Perrigo exiting some less profitable businesses.
Perrigo Company (PRGO) vs. S&P 500 (SPY)
Market Cap
$4.02B
Dividend Yield3.85%
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)0.57
Revenue Growth-6.05%
EPS Growth-1677.05%
CountryUS
Employees9,140
SectorHealthcare
Sector Strength74
IndustryPharmaceuticals
Share Statistics
EPS (TTM)-1.19
Shares Outstanding136,458,620
10 Day Avg. Volume2,839,020
30 Day Avg. Volume1,751,424
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.92
Price to Cash Flow (P/CF)3.20
P/FCF Ratio6.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$36.50Price Target Upside31.48% Upside
Rating ConsensusHold
Number of Analyst Covering4
Perrigo Company Business Overview & Revenue Model
Company DescriptionPerrigo Company plc (PRGO) is a global healthcare supplier that develops, manufactures, and distributes over-the-counter (OTC) healthcare products and pharmaceutical products. The company operates in the consumer self-care and prescription pharmaceuticals sectors, offering a wide range of products that include generic prescription drugs, infant formula, nutritional products, and various OTC remedies and wellness solutions. Perrigo is recognized for providing quality healthcare products at accessible prices, catering to both individual consumers and healthcare providers.
How the Company Makes MoneyPerrigo Company generates revenue through the sale of its diverse portfolio of self-care and pharmaceutical products. The company operates primarily through two segments: Consumer Self-Care Americas (CSCA) and Consumer Self-Care International (CSCI), with both segments offering OTC healthcare products, nutritional products, and medical devices. Perrigo's revenue model is based on manufacturing and distributing these products under private-label and store-brand models, as well as selling branded products. Key revenue streams include sales to major retail chains, pharmacies, and e-commerce platforms. Additionally, Perrigo's strategic partnerships with retailers and healthcare providers, along with its focus on expanding its product line and geographic reach, significantly contribute to its earnings.
Perrigo Company Financial Statement Overview
Summary
Perrigo Company shows strong liquidity and improved debt management with no total debt and a healthy equity ratio. However, it struggles with profitability, evidenced by negative net income margins and declining revenue. Operational efficiency is present with positive EBIT margins, but cash flow generation has weakened.Income Statement
Perrigo Company has faced challenges in maintaining revenue growth, with a decline in total revenue from $4.66 billion in 2023 to $4.37 billion in 2024. Gross profit margin stands at 35.27% for 2024, which is a decrease from previous years, indicating pressure on pricing or cost controls. The net profit margin is negative due to consistent net losses over the years. However, the EBIT margin of 2.58% shows some operational efficiency despite declining earnings.55
Neutral
Balance Sheet
The company's balance sheet reflects a positive equity position, with stockholders' equity of $4.32 billion and total assets of $9.65 billion in 2024, resulting in an equity ratio of 44.78%. The elimination of total debt in 2024 significantly improves the debt-to-equity ratio, enhancing financial stability. Return on Equity remains negative due to net losses, but the company maintains a strong liquidity position.75
Positive
Cash Flow
Operating cash flow declined to $362.9 million in 2024, reflecting operational challenges. Free cash flow decreased from $303.8 million in 2023 to $244.6 million in 2024, indicating reduced capacity for self-financing. However, the company has improved its cash position with no net debt, and cash flow management remains robust despite profitability issues.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.37B | 4.66B | 4.45B | 4.14B | 5.06B | Gross Profit |
| 1.54B | 1.68B | 1.46B | 1.42B | 1.82B | EBIT |
| 112.90M | 151.90M | 172.80M | 573.70M | 932.40M | EBITDA |
| 112.90M | 525.00M | 507.20M | 915.60M | 661.90M | Net Income Common Stockholders |
| -171.80M | -12.70M | -130.90M | -130.90M | -162.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 558.80M | 751.30M | 600.70M | 1.86B | 641.50M | Total Assets |
| 9.65B | 10.81B | 11.02B | 10.43B | 11.49B | Total Debt |
| 3.62B | 4.07B | 4.11B | 3.52B | 3.57B | Net Debt |
| -558.80M | 3.32B | 3.51B | 1.66B | 2.92B | Total Liabilities |
| 5.33B | 6.04B | 6.18B | 5.27B | 5.83B | Stockholders Equity |
| 4.32B | 4.77B | 4.84B | 5.15B | 5.66B |
| Cash Flow | Free Cash Flow | |||
| 244.60M | 303.80M | 210.90M | 4.20M | 465.80M | Operating Cash Flow |
| 362.90M | 405.50M | 307.30M | 156.30M | 636.20M | Investing Cash Flow |
| 78.80M | -77.50M | -1.96B | 1.28B | -187.80M | Financing Cash Flow |
| -611.00M | -187.20M | 421.60M | -178.70M | -181.10M |
Perrigo Company Technical Analysis
Positive
27.76
Price Trends
25.08
Positive
25.62
Positive
26.03
Positive
Market Momentum
1.00
Negative
62.05
Neutral
63.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRGO, the sentiment is Positive. The current price of 27.76 is above the 20-day moving average (MA) of 25.71, above the 50-day MA of 25.08, and above the 200-day MA of 26.03, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 62.05 is Neutral, neither overbought nor oversold. The STOCH value of 63.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRGO.
Perrigo Company Risk Analysis
Perrigo Company disclosed 46 risk factors in its most recent earnings report. Perrigo Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Perrigo Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.76B | 20.08 | 14.15% | 3.34% | -0.85% | -23.40% | |
68 Neutral | $4.02B | ― | -3.53% | 3.85% | -6.05% | -1677.05% | |
62 Neutral | $2.78B | ― | 106.97% | ― | 16.73% | -22.44% | |
52 Neutral | $2.17B | ― | -16.38% | ― | -0.53% | -4131.19% | |
51 Neutral | $944.14M | ― | -17.15% | ― | 12.15% | 61.33% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
45 Neutral | $35.02M | ― | -20.40% | ― | -13.15% | -326.10% |
* Healthcare Sector Average
Performance Comparison
PRGO
Perrigo Company
27.76
-1.65
-5.61%
HBIO
Harvard Bioscience
0.82
-3.54
-81.19%
MYGN
Myriad Genetics
10.18
-12.40
-54.92%
NEOG
Neogen
10.40
-5.79
-35.76%
PDCO
Patterson Companies
31.13
4.84
18.41%
AMRX
Amneal Pharmaceuticals
8.90
3.52
65.43%
Perrigo Company Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 16.20% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in cost savings and operational efficiencies, particularly in the success of Project Energize and the supply chain reinvention program. However, these positives were counterbalanced by a decline in overall sales and challenges in the U.S. store brand market. Despite these challenges, the company remains optimistic about its strategic initiatives and future growth potential.Highlights
Project Energize Achievements
Achieved $95 million in gross savings year-to-date with a target of $140-$170 million by end of 2026.
Supply Chain Reinvention Program
Delivered gross savings of $32 million year-to-date with improved gross margins and increased U.S. OTC service levels to 92%.
Infant Formula Business Recovery
Net sales grew 3% year-over-year and 58% sequentially with high quality production and packaging.
Earnings Performance
EPS increased by 27% year-over-year to $0.81, with operating income growth of 21.3%.
Debt Refinancing
Issued $1.1 billion in notes due in 2032, redeems $700 million notes due in 2026, resulting in a lower weighted average interest rate.
Lowlights
Overall Sales Decline
Third quarter net sales decreased by 3.2% year-over-year, with organic net sales declining by 2.4%.
Impact of Lost Distribution
Lost distribution of lower-margin products in U.S. store brand impacted organic net sales by -2.8 percentage points.
Challenges in U.S. Store Brand Market
Organic net sales in the CSCA segment declined 4.4% due to lost distribution and lower nutrition category sales.
Competitive Market Pressures
Pricing competition expected to increase in core categories, potentially affecting margins.
Company Guidance
During the Perrigo Q3 2024 earnings call, the company provided several key metrics and guidance for the future. Project Energize has yielded $95 million in gross savings year-to-date, with expectations of $140 million to $170 million in annualized savings by the end of 2026. The supply chain reinvention program achieved $32 million in gross savings year-to-date, contributing to a 41% gross margin in Q3, which is a 160-basis point improvement from the previous year. Perrigo reported an EPS of $0.81, marking a 27% year-over-year increase, and reaffirmed its 2024 adjusted EPS range of $2.50 to $2.65. Despite a 3.2% drop in net sales and a 2.4% decline in organic net sales, the company experienced a substantial 21.3% growth in operating income. The company is focused on stabilizing key business areas and streamlining operations, projecting a year-end cash balance between $500 million to $550 million and maintaining its EPS growth target of $3 for 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.