Perrigo (PRGO): Assessing Valuation After Class Action Lawsuits and Revised Outlook

Perrigo (NYSE:PRGO) is under pressure after multiple law firms filed class action lawsuits alleging the company failed to disclose major issues in its infant formula business. This development comes after weaker quarterly results and revised fiscal guidance.

See our latest analysis for Perrigo.

After a relatively stable start to the year, Perrigo’s share price has sharply declined with momentum fading fast. Its 30-day share price return sits at -39.8%, and total shareholder return for the past year is now down -52.4%. The steep drop reflects mounting investor unease as legal troubles and operational challenges stack up, raising questions about future recovery and valuation.

If this sharp reversal has you considering other opportunities, now might be the perfect time to broaden your outlook and discover fast growing stocks with high insider ownership

With shares trading far below analyst targets and investor sentiment at a low, the real question now is whether Perrigo offers a rare value opportunity or if the recent selloff accurately reflects deeper challenges ahead.

Most Popular Narrative: 39.9% Undervalued

Compared to Perrigo’s recent closing price of $12.92, the most-followed narrative assigns a fair value that is substantially higher. This creates a sharp contrast between current market sentiment and what is implied by future expectations.

Increasing consumer cost-consciousness is driving stronger adoption of store-brand (private label) OTC products, with Perrigo reporting accelerated unit and volume share gains. This structural shift is expanding Perrigo's addressable market and supports enduring top-line revenue growth. The aging global population and rising consumer interest in self-care and wellness continue to create longer-term demand tailwinds for Perrigo's OTC and nutrition products, providing stable, defensive revenue streams even in periods of macro uncertainty.

Read the complete narrative.

Curious how this outlook gets priced so aggressively above today's share price? The core of this narrative lies in bold projections for revenue growth, profit turnaround, and profit multiples that are rarely expected outside of rapid-growth sectors. Uncover exactly what future milestones analysts believe could justify such a premium.

Result: Fair Value of $21.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent category weakness or further operational missteps in infant formula could quickly derail expectations for Perrigo’s turnaround and re-rating story.

Find out about the key risks to this Perrigo narrative.

Build Your Own Perrigo Narrative

If you see Perrigo’s outlook differently or want to dig into the numbers yourself, it’s easy to analyze the data and shape your own perspective in just a few minutes. Do it your way

A great starting point for your Perrigo research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Ready for More Smart Investment Moves?

Don't wait on the sidelines while the market evolves. Let Simply Wall Street’s powerful screener help you pinpoint tomorrow’s winners with opportunities you won’t want to miss.

• Spot high-potential bargains before the crowd by scanning these 925 undervalued stocks based on cash flows based on robust cash flow signals and undervaluation metrics.
• Boost your portfolio's passive income by checking out these 14 dividend stocks with yields > 3% that routinely deliver yields above 3%.
• Get ahead of tomorrow’s innovation curve by seeing the groundbreaking businesses powering next-gen machine learning with these 26 AI penny stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com