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Perrigo Company (PRGO)
:PRGO
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Perrigo Company
(NYSE:PRGO)
Rating:63Neutral
Price Target:
$28.00
▲( 5.42% Upside)
Positive Factors
Financial Performance
Perrigo has strong gross margins and operational execution, leading to adjusted EBITDA and EPS results that beat Street estimates.
Market Share
Ensuring stringent standards for international manufacturers could allow Perrigo to gain market share as foreign manufacturers adjust or potentially stop importing into the US.
Regulatory Environment
The FDA's Operation Stork Speed initiative could benefit Perrigo as it levels the playing field among infant formula manufacturers.
Strategic Investments
Management is investing significantly with plans to invest an incremental ~$240M into infant formula between FY25-FY27.
Negative Factors
International Competition
Operation Stork Speed emphasizes US-based manufacturing, which may protect domestic companies like Perrigo from international competition.
Sales Performance
Sales were down due to exiting lower-margin businesses, divestments, and currency headwinds.
Perrigo Company (PRGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.65B
Dividend Yield4.23%
Average Volume (3M)1.38M
Price to Earnings (P/E)―
Beta (1Y)0.37
Revenue Growth-4.85%
EPS Growth-4290.31%
CountryUS
Employees8,379
SectorHealthcare
Sector Strength42
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.60
Shares Outstanding137,477,310
10 Day Avg. Volume1,388,222
30 Day Avg. Volume1,381,824
Financial Highlights & Ratios
PEG Ratio3.14
Price to Book (P/B)0.86
Price to Sales (P/S)0.00
P/FCF Ratio15.18
Enterprise Value/Market Cap1.85
Enterprise Value/Revenue0.38
Enterprise Value/Gross Profit4.39
Enterprise Value/Ebitda4.85
Forecast
1Y Price Target
$34.25Price Target Upside28.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Perrigo Company Business Overview & Revenue Model
Company DescriptionPerrigo Company plc provides over-the-counter (OTC) health and wellness solutions that enhance individual well-being by empowering consumers to prevent or treat conditions that can be self-managed. The company operates through two segments, Consumer Self-Care Americas and Consumer Self-Care International. The Consumer Self-Care Americas segment focuses primarily on the development, manufacture, marketing, and sale of store brand, self-care products in categories, including upper respiratory, pain and sleep-aids, digestive health, nutrition, vitamins, minerals and supplements, healthy lifestyle, skincare and personal hygiene, and oral self-care in the United States, Mexico, Canada, and South America. The segment offers its products under the Prevacid 24HR, Good Sense, Zephrex D, ScarAway, Plackers, Rembrandt, Steripod, Firefly, REACH, Dr. Fresh, and Burt's Bees brand names. The Consumer Self-Care International segment develops, manufactures, markets, and distributes consumer self-care brands through a network of pharmacies, wholesalers, drug and grocery store retailers, and para-pharmacies in approximately 23 countries, primarily in Europe. The company also offers contract manufacturing services. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.
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 exhibits strong liquidity and improved debt management, with no total debt and a healthy equity ratio. However, it struggles with profitability, reflected in negative net income margins and declining revenue. Operational efficiency is demonstrated through positive EBIT margins, although cash flow generation has weakened. Financial health is stable, but growth and profitability need strategic attention.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 |
| 493.70M | 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 |
| 3.06B | 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
26.56
Price Trends
26.35
Positive
25.79
Positive
26.03
Positive
Market Momentum
0.27
Negative
52.50
Neutral
41.83
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 26.56 is above the 20-day moving average (MA) of 26.23, above the 50-day MA of 26.35, and above the 200-day MA of 26.03, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 52.50 is Neutral, neither overbought nor oversold. The STOCH value of 41.83 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 (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.79B | 29.01 | 6.32% | ― | 11.82% | ― | |
63 Neutral | $3.65B | ― | -3.64% | 4.23% | -4.85% | -4290.31% | |
60 Neutral | $1.25B | ― | -5.19% | ― | 30.26% | -173.36% | |
58 Neutral | $18.89B | ― | -18.98% | ― | 3.38% | -175.90% | |
57 Neutral | $2.24B | ― | 106.97% | ― | 13.42% | 92.50% | |
55 Neutral | $9.98B | ― | -21.25% | 5.65% | -6.88% | -6809.78% | |
53 Neutral | $5.14B | 3.03 | -43.89% | 2.83% | 16.75% | -0.06% |
* Healthcare Sector Average
Performance Comparison
PRGO
Perrigo Company
26.56
0.29
1.10%
VTRS
Viatris
8.29
-1.63
-16.43%
SUPN
Supernus Pharmaceuticals
32.10
5.03
18.58%
TEVA
Teva Pharmaceutical
16.96
0.20
1.19%
ANIP
ANI Pharmaceuticals
57.79
-5.44
-8.60%
AMRX
Amneal Pharmaceuticals
7.16
0.37
5.45%
Perrigo Company Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 7.62%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in key areas such as infant formula sales, cost savings from Project Energize, and international business growth. However, challenges remain with lost distribution in the U.S. Store Brand business, tariff-related cost increases, and a challenging macroeconomic environment. Despite these challenges, Perrigo is taking proactive measures to mitigate risks and capitalize on growth opportunities.Q1-2025 Updates
Positive Updates
Strong Growth in Infant Formula Sales
First quarter 2025 infant formula net sales increased by 19% compared to the same quarter last year.
Project Energize Cost Savings
Project Energize achieved an additional $20 million in annual savings, bringing the program's total annual run rate to $159 million.
Improvement in Global Service Levels
Actions taken to improve service levels are paying dividends with global service levels now at 94%.
Expansion in International Business
International business grew mid-single digits at 5% in net sales and 10% in organic adjusted operating income.
EPS Growth
First quarter EPS grew by 107% year-over-year to $0.60 per share.
Gross Margin Improvement
Gross margin expanded 440 basis points year-over-year to 41%, driven by business recovery in infant formula.
Negative Updates
Challenges in U.S. Store Brand Business
Organic net sales declined 0.4%, impacted by previously disclosed lost distribution in U.S. Store Brand.
Tariff-Related Cost Increases
In 2025, Perrigo expects roughly 1% gross increase to global cost of goods sold due to tariffs, rising to approximately 5.5% on a full-year basis.
Uncertain Macroeconomic Environment
Consumer confidence in the U.S. and Europe is low, affecting sales across self-care categories.
Slower Store Brand Share Recovery
Short-term pricing actions by domestic brands have temporarily reduced the price gap between national brands and store brands, slowing store brand share recovery.
Company Guidance
In the Perrigo Q1 2025 Financial Results Conference Call, the company provided a detailed update on its performance and strategic plans. Notably, Perrigo reported that first quarter infant formula net sales rose by 19% year-over-year, while the supply chain reinvention program contributed an additional $8 million in benefits. Project Energize achieved $20 million in annual savings, reaching a run rate of $159 million. The global service levels increased to 94%, and first quarter EPS grew by 107% to $0.60 per share. Organic net sales declined by 0.4%, but excluding certain factors, they grew by 1.8%. Gross margin expanded by 440 basis points to 41%, and operating margin grew by 550 basis points. Despite macroeconomic uncertainties and tariff impacts, Perrigo reaffirmed its adjusted EPS range and midterm 2027 targets. The company widened its 2025 net sales projections to account for market fluctuations but maintained a positive outlook based on strategic initiatives and operational efficiencies.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.