Perrigo Company (PRGO) AI Stock Analysis

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Perrigo Company

(NYSE:PRGO)

62Neutral

Perrigo's stock score reflects a company with strong liquidity and no debt, which is a positive in terms of financial stability. However, profitability issues and declining revenue weigh heavily on its financial performance. The technical analysis is moderately positive, indicating some potential for short-term gains. Valuation is challenging due to negative earnings, though the dividend yield is a compensating factor for investors seeking income.

Positive Factors

Innovation and Growth

Perrigo expands Scientific Office, announces new Chief Scientific Officer and new Disruptive Growth Team; BUY.

Market Share

PRGO has seen some recovery in the last few months to HSD % of volume share in the US, indicating a positive trend in market share.

Regulatory Environment

HHS infant formula update should be a positive for PRGO; as recent investments into their facilities already meet stringent guidelines, including already testing for heavy metals.

Negative Factors

Sales Forecast

Management reiterated that sales would likely be at the lower end of the forecasted range due to exiting lower-margin businesses and SKU prioritization.

Perrigo Company (PRGO) vs. S&P 500 (SPY)

Market Cap

$3.59B

Dividend Yield4.25%

Average Volume (3M)2.05M

Price to Earnings (P/E)―

Beta (1Y)0.53

Revenue Growth-6.05%

EPS Growth-1677.05%

CountryUS

Employees8,379

SectorHealthcare

Sector Strength77

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)-1.19

Shares Outstanding136,458,620

10 Day Avg. Volume1,524,709

30 Day Avg. Volume2,050,778

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.87

Price to Cash Flow (P/CF)3.10

P/FCF Ratio6.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$33.33

Price Target Upside28.00% 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 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

Neutral

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
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

Technical Analysis Sentiment

Negative

Last Price26.04

Price Trends

50DMA

26.30

Negative

100DMA

26.15

Negative

200DMA

26.13

Negative

Market Momentum

MACD

0.44

Positive

RSI

54.02

Neutral

STOCH

50.42

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRGO, the sentiment is Negative. The current price of 26.04 is below the 20-day moving average (MA) of 27.55, below the 50-day MA of 26.30, and below the 200-day MA of 26.13, indicating a bearish trend. The MACD of 0.44 indicates Positive momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 50.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANIP	65 Neutral	$1.47B	―	-4.86%	―	26.20%	-219.22%
SUPN	64 Neutral	$1.83B	24.48	7.55%	―	8.94%	5171.26%
PRGO	62 Neutral	$3.59B	―	-3.53%	4.25%	-6.05%	-1677.05%
AMRX	62 Neutral	$2.31B	―	106.97%	―	16.73%	-22.44%
VTRS	54 Neutral	$9.10B	―	-3.24%	6.30%	-4.58%	-1269.23%
TEVA	50 Neutral	$16.94B	―	-25.44%	―	4.34%	-206.85%
Sector *	48 Neutral	$6.35B	1.19	-46.87%	2.63%	17.16%	1.34%

* Healthcare Sector Average

Performance Comparison

PRGO

Perrigo Company

26.04

-4.94

-15.95%

VTRS

Viatris

7.36

-3.96

-34.98%

SUPN

Supernus Pharmaceuticals

32.27

0.54

1.70%

TEVA

Teva Pharmaceutical

13.94

-0.03

-0.21%

ANIP

ANI Pharmaceuticals

66.99

-0.06

-0.09%

AMRX

Amneal Pharmaceuticals

7.21

1.48

25.83%

Perrigo Company Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: 9.00% | 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.