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On Tuesday, Piper Sandler reaffirmed its Neutral rating on Perrigo Co . shares (NYSE:PRGO), with a steady price target of $27.00. The decision follows a recent engagement with the company and its participation in a conference, which prompted a review and slight adjustments to the investment firm’s financial model for Perrigo. According to InvestingPro data, Perrigo’s stock has shown resilience with an 11.08% YTD return, despite current profitability challenges. The company maintains strong financial health with a current ratio of 2.38, indicating solid liquidity.
In her statement, Piper Sandler analyst Korinne Wolmeyer addressed several inquiries raised by investors, particularly regarding Perrigo’s long-range plans and current market valuation. She noted that while investor sentiment has been positive about the company’s 2025 guidance and long-range plan, there was a need for more information on specific areas.
Wolmeyer highlighted that clarifications were sought on matters concerning Perrigo’s infant formula business, the impact of taxes and tariffs, as well as trends among end consumers. In response, Piper Sandler aimed to shed light on these topics to better inform investors.
Despite these discussions and clarifications, Piper Sandler’s full-year estimates for Perrigo remain largely the same. The firm has fine-tuned its model to align more closely with the phasing and performance of different segments as previously outlined by Perrigo.
Wolmeyer concluded, "Our full-year estimates are largely unchanged, but we’re better aligning with the previously-communicated anticipated phasing and segment performance. Our Neutral rating and $27 PT are unchanged." Piper Sandler’s stance on Perrigo indicates a wait-and-see approach, as the company’s stock continues to be evaluated against its long-term financial projections and market position.
In other recent news, Perrigo Company reported fourth-quarter revenue of $1.29 billion, surpassing analyst expectations of $1.2 billion. Despite this revenue beat, adjusted earnings per share were $0.93, slightly below the anticipated $0.95. For the entire year of 2024, Perrigo’s net sales reached $4.37 billion, marking a 6.1% decline from the previous year, with adjusted diluted earnings per share aligning with the midpoint of its guidance at $2.57. The company noted significant growth in its infant formula segment, with net sales rising 17% in the fourth quarter due to market share gains and improved customer inventory levels.
Perrigo’s President and CEO, Patrick Lockwood-Taylor, emphasized the company’s efforts to stabilize and streamline operations, preparing for long-term growth. Looking forward, Perrigo plans to unveil its strategic plan for 2025-2027 at an upcoming virtual Investor Day event, where it will also provide guidance for fiscal 2025. In analyst coverage, Jefferies adjusted its price target for Perrigo to $31, maintaining a Hold rating, reflecting cautious optimism about the company’s transformation efforts. Analyst Keith Devas from Jefferies highlighted the importance of Perrigo’s earnings per share re-basing in 2025 as a key indicator of the company’s trajectory. These developments indicate a period of strategic change and potential growth for Perrigo, with investors closely monitoring its progress.
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