Perrigo’s portfolio shift and recent earnings in focus

Perrigo (PRGO) has completed the sale of its Dermacosmetics business for US$359 million and is reviewing its Infant Formula and Oral Care units, while also reaffirming 2026 guidance for declining All In net sales.

These moves sit alongside fresh second quarter numbers. Sales were US$1,022.8 million, net income was US$74.5 million and earnings per share turned positive compared with a loss a year earlier.

The recent portfolio changes and earnings update have arrived after a sharp 29.6% 1 month share price return and a 20.9% 3 month share price return for Perrigo, although the 1 year total shareholder return is still down 39.5%. This points to improving short term momentum set against a weak longer term record.

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The sharp rebound in Perrigo’s share price contrasts with weak multi year returns and mixed recent results. Are investors now reassessing the underlying business after the portfolio shift, or has sentiment simply swung too far in the other direction?

Most Popular Narrative: 22.2% Undervalued

The most followed valuation narrative for Perrigo puts fair value at $16.50 per share compared with the latest close at $12.83. This frames a sizeable gap that analysts link to execution on its self-care focus.

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.

Want to see what underpins that valuation gap for Perrigo? The narrative leans heavily on a profit turnaround, steadier revenues and a rich future earnings multiple. Curious how those ingredients combine into a single fair value number.

Result: Fair Value of $16.50 (UNDERVALUED)

However, Perrigo’s story could change if soft category demand persists or if infant formula and OTC competition keeps squeezing volumes and margins.

Next Steps

With that mixed sentiment around Perrigo in mind, this is a good time to look through the data yourself and weigh both sides. To see the balance between concerns and optimism in one place, check out the 4 key rewards and 1 important warning sign.

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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.