Perrigo (PRGO): Evaluating Undervaluation After Recent Share Price Dip and Strategic Shifts

Perrigo (PRGO) shares have drifted lower over the past month, dropping about 8%. The stock now trades near $20, with the company’s performance reflecting ongoing shifts within the broader pharmaceutical sector and investor sentiment.

See our latest analysis for Perrigo.

Zooming out, Perrigo’s share price return has tumbled around 20% year-to-date. Momentum has faded over the past three months, and total shareholder returns are down roughly 17% in the last year. The recent dip reflects ongoing uncertainty. Over the longer term, the stock’s five-year total shareholder return of nearly -45% makes its valuation and recovery potential worth closer scrutiny.

If shifting healthcare trends have you watching more than just Perrigo, you can see what else is happening in the sector with our See the full list for free.

With shares now trading well below analyst price targets, the key question becomes whether Perrigo is genuinely undervalued at current levels or if the recent weakness simply reflects market doubts about the company’s long-term growth prospects.

Most Popular Narrative: 36.2% Undervalued

Perrigo's most popular narrative sets a fair value significantly above the current trading price of $20.74, suggesting the stock has notable upside if the projections are met. The gap between these values is driven by optimism around future financial improvements as well as ongoing operational shifts.

Strategic portfolio simplification, including the recent sale of the Dermacosmetics business, allows Perrigo to focus investment on core, higher-growth segments. This can bolster gross and operating margins and accelerate deleveraging. Ongoing operational initiatives like Project Energize and supply chain reinvention are generating $150M and $200M in savings. These savings are funding innovation and margin-accretive investments, which are expected to further improve gross margins and net earnings over time.

Read the complete narrative.

Curious what ambitious financial assumptions lie beneath the surface? The narrative leans heavily on transformational cost savings, margin expansion, and a rebound that could change how investors view Perrigo’s true worth. Uncover which forecasting levers matter most in shaping that fair value and see the numbers that could flip the valuation story.

Result: Fair Value of $32.5 (UNDERVALUED)

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

However, continued soft demand in key product categories or stronger competitive pressure could undermine Perrigo’s path to sustainable revenue growth and margin improvement.

Find out about the key risks to this Perrigo narrative.

Build Your Own Perrigo Narrative

If the existing storyline does not match your perspective or you would rather dig into the data on your own terms, you can quickly craft your own narrative in under three 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.

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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.

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