Perrigo (PRGO): Reassessing Valuation After Class Action Lawsuits Over Nestlé Infant Formula Acquisition

Perrigo (PRGO) is back in the spotlight after multiple law firms launched securities class actions tied to its Nestlé infant formula acquisition, putting fresh pressure on a stock already down sharply over the past year.

See our latest analysis for Perrigo.

The legal overhang has amplified existing concerns, with the 90 day share price return of minus 37.32 percent and a 1 year total shareholder return of minus 45.28 percent underscoring that momentum is firmly fading rather than stabilising.

If this kind of risk reset has you rethinking your exposure, it could be a good moment to explore other established names across healthcare stocks for potentially steadier opportunities.

Yet with Perrigo trading at a steep historical discount to analyst targets despite modest revenue growth, investors must now weigh whether the sell off overshoots the damage or whether markets are already pricing in limited future upside.

Most Popular Narrative: 38% Undervalued

With Perrigo last closing at $13.33 against a narrative fair value near $21.50, the disconnect suggests sentiment is far weaker than the model implies.

Strategic portfolio simplification, including the recent sale of the Dermacosmetics business, allows Perrigo to focus investment on core, higher growth segments, bolstering gross and operating margins and accelerating deleveraging.

Ongoing operational initiatives like Project Energize and supply chain reinvention are generating $150M to $200M in savings, funding innovation and margin accretive investments, which are expected to further improve gross margins and net earnings over time.

Read the complete narrative.

Want to see how modest top line growth, rising margins and a richer future earnings multiple combine into that valuation gap? The full narrative unpacks the math behind this upside case, step by step.

Result: Fair Value of $21.50 (UNDERVALUED)

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

However, ongoing weakness in infant formula and intensifying private label competition could derail margin recovery and limit the upside implied by bullish forecasts.

Find out about the key risks to this Perrigo narrative.

Build Your Own Perrigo Narrative

If you see the story differently or want to stress test the assumptions with your own inputs, you can build a fresh narrative in 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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