Perrigo (PRGO) Valuation Revisited After Class Action Lawsuits Over Infant Formula Disclosures

Legal trouble around Perrigo (PRGO) is now front and center, with multiple class action lawsuits alleging the company misled investors about problems in its newly acquired infant formula business and the impact on its outlook.

See our latest analysis for Perrigo.

The legal overhang is affecting a stock that was already under pressure, with a roughly 48 percent year to date share price decline and similarly steep multi year total shareholder returns. This suggests momentum has clearly faded as investors reassess risk.

If Perrigo’s situation has you rethinking where you take risk, this could be a good moment to explore other consumer health and wellness names via healthcare stocks.

With shares trading at a steep discount to analyst targets despite modest revenue growth and improving earnings trends, the key question now is whether Perrigo is genuinely undervalued or whether the market is correctly pricing in weaker future growth.

Most Popular Narrative: 37.1% Undervalued

Compared to Perrigo’s last close at $13.52, the most followed narrative points to a substantially higher fair value of $21.50, framing today’s price as a discount that hinges on improving fundamentals.

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.

Curious how modest top line growth, rising margins and a richer future earnings multiple all combine to justify that higher value? The narrative breaks down the specific profit rebound and valuation re-rating assumptions that underpin this target, and shows how they could transform today’s loss making profile into a very different earnings story.

Result: Fair Value of $21.50 (UNDERVALUED)

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

However, persistent infant formula setbacks and intensifying competition could derail margin recovery and force the market to rethink any undervaluation case.

Find out about the key risks to this Perrigo narrative.

Build Your Own Perrigo Narrative

If you see the story differently or prefer building your own view from the numbers, you can craft a full 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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