Perrigo Company plc (PRGO): what the price assumes
In the published model solve dated 2026-Q2, anchored at $13.27, Perrigo Company plc (PRGO) is priced for +12.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PRGO
Headline
| Field | Value |
|---|---|
| Ticker | PRGO |
| Company | Perrigo Company plc |
| Current price | $13.27/sh |
| Composition | CSCA - Upper Respiratory 12% / CSCA - Digestive Health 10% / CSCA - Nutrition 10% / CSCA - Pain and Sleep-Aids 8% / CSCA - Healthy Lifestyle 7% / CSCA - Oral Care 6% / CSCA - Skin Care 5% / CSCA - Women's Health 2% / CSCA - Vitamins, Minerals, and Supplements (VMS) 0% / CSCA - Other CSCA 0% / CSCI - Skin Care 10% / CSCI - Upper Respiratory 7% / CSCI - Pain and Sleep-Aids 6% / CSCI - Healthy Lifestyle 5% / CSCI - VMS 4% / CSCI - Women's Health 3% / CSCI - Oral Care 2% / CSCI - Digestive Health 1% / CSCI - Other CSCI 1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 3.2% |
| Operating margin (mid-cycle) | 3.9% |
| Margin compression (value-band) | -0.7pp |
| Trailing margin (depressed year) | -36.9% |
| Implied growth | 12.3% |
| Multiple paid | 32x mid-cycle operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~9.5pp (computed at the 7% minimum rate; the CAPM rate 5.1% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~6.5 years; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.52σ |
| sustained it ~5 years at this level | 53% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.78x | 2 | justifies |
| Earnings | — | 0 | — |
| Relative | — | 0 | — |
| Growth | — | 0 | — |
Families that justify the price: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.7%); the inversion above states its own rate.
Per-Model Detail (n=2)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | FCF base $0.1B, growth -4% (input: historical growth), terminal g 0.5%, WACC 5.7%, 5yr projection |
| DCF Exit Multiple | Growth | $9.40 | 1.41x | no | Exit EV/EBITDA: 6046.4x / 6048.4x / 6050.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/S fallback (negative EPS): Sector P/S 4.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | $0.38 | 34.91x | yes | DPS $1.15, g=-72.7% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% (excluded from median) |
| Two-Stage DDM | Growth | $-14.21 | — | no | Stage 1: -200% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $18.02 | 0.74x | yes | Reference only (book value floor): BV/sh $18.02, ROE negative |
| Two-Stage Excess Return | Asset | $16.21 | 0.82x | yes | Reference only (book value with convergence): BV/sh $18.02, ROE converges to ke |
| Discounted Future Market Cap | Growth | $7.61 | 1.74x | no | Rev $4.2B, growth -4% (input: historical growth; tapered), Terminal P/S: 0.4x / 0.4x / 0.5x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $2.92 | 4.54x | no | Normalized EBIT (5y avg op income, one-time charges added back) $0.30B × (1−21%) / WACC 5.7% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.00B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $0.01 | 1326.50x | yes | FCF $107.7M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 1326.50x | yes | SBC-adj FCF $0.05B (FCF $0.11B − SBC $0.06B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | Revenue $4.18B × sector P/S 4.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Consumer Self-Care Americas | operating | enterprise | $2.6b | — | withheld | unresolved no unit value |
| Consumer Self-Care International | operating | enterprise | $1.7b | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $3.2b |
| Net debt / NOPAT (after-tax) | 25.12x |
| Net debt / operating income (pre-tax) | 19.84x |
| Share count CAGR (dilution) | 0.9% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 3.9%); the trailing year was depressed.
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Perrigo is the leading maker of store-brand and OTC self-care products, spanning respiratory, digestive, skin, pain, and nutrition across U.S. and international segments. Trailing margins are distorted by impairments, but the through-the-cycle margin is in the low single digits.
- Capital allocation is now defensive and debt-focused. The company sold its Dermacosmetics business for €305.6 million to pay down a $3.6 billion debt load, while a roughly 11% dividend yield signals the market doubts the payout's durability.
- At $10.25 the price pays about 30 times normalized operating income, implying about 10.5% growth, with the case resting on a margin recovery from restructuring against an 8% core sales decline.
Bull Case
The most useful lens on Perrigo right now is capital allocation, because the company is being managed for balance-sheet repair and margin recovery, not growth, and the moves it is making are the bull case. Management sold its Dermacosmetics business after the quarter for €305.6 million, with the proceeds earmarked for debt reduction against a roughly $3.6 billion load. Alongside that, restructuring under Project Energize and the Supply Chain Reinvention Program is delivering real savings, with cumulative annual run-rate benefits of $157 million reported in late 2025 and adjusted operating margin expanding 90 basis points. This is a deliberate effort to shrink debt, take out cost, and rebuild margin, the textbook turnaround sequence for a leveraged consumer staple.
The underlying franchise has genuine value and a defensible niche. Perrigo is the dominant supplier of store-brand OTC products, the private-label medicines and self-care goods that sit next to the national brands at lower prices. The filing lists its competitive advantages as "a diverse product portfolio, leadership in first-to-market product development, and product life cycle management" plus "experienced research and development, innovation and regulatory capabilities" (FY2025 10-K). In a value-conscious consumer environment, store brands tend to gain share, and management reported share gains in both U.S. store brand OTC and key international brands even amid soft volumes.
The valuation reflects a depressed moment, not a dead business. Trailing earnings are distorted by a $330.8 million goodwill impairment and prior manufacturing headwinds, so the right read uses the through-the-cycle margin, against which the asset-based and relative-multiple methods support the $10.25 price (June 28, 2026). First-quarter adjusted EPS of $0.43 beat the $0.32 consensus, and management reaffirmed full-year EPS guidance of $2.00 to $2.30, with the first-half headwinds, a weak cough-and-cold season and carryover manufacturing issues, described as transitory and expected to lap in the second half. If the margin recovery lands and debt comes down, the stock is being valued at a low multiple of normalized earnings, with an additional dividend yield near 11%.
Bear Case
The cycle position is the heart of the bear case: Perrigo is not at a peak earning power that will mean-revert up; it is a low-margin business that has been struggling to hold the line on volume, and the trailing numbers are ugly for a reason. Core net sales fell 8.3% in the first quarter, an 11% organic decline, and the company took a $330.8 million goodwill impairment, producing a reported loss of $2.81 per share. The through-the-cycle margin is only in the low single digits, so this is a thin-margin business where small swings in volume or input cost move profitability a lot. The store-brand model itself depends on others: the filing notes the U.S. self-care business "does not advertise our store brand products" and is "largely dependent on retailer promotional activities to drive sales volume" (FY2025 10-K). When retailers pull back on promotion or consumers trade patterns shift, Perrigo has limited control.
The balance sheet is the second weight, and it is serious. With a $3.6 billion debt load and a $114 million operating cash outflow in the quarter, the company is using asset sales like Dermacosmetics to deleverage rather than to invest, and the credit agreement carries floating-rate exposure (FY2025 10-K). A roughly 11% dividend yield is not a gift; it is the market pricing in real doubt that the payout is sustainable against the debt and the cash burn. A high yield on a leveraged turnaround is a classic value-trap signal, and analyst targets have been cut, with JPMorgan lowering its target into the mid-teens to as low as $15.
The execution risk on the turnaround rounds it out. The bull case requires the restructuring savings to outrun the volume declines and the margin to recover in the second half, but turnarounds in consumer staples are slow and often disappointing, and the demand softness in core categories may prove less transitory than management hopes. The relative-multiple method that supports the price assumes a normalization that has not yet shown up in the numbers. If the second-half recovery slips, the margin stays depressed, and the debt keeps consuming cash, the value-and-asset support thins and the dividend itself comes into question.
Valuation
Because trailing earnings are depressed by impairments and manufacturing headwinds, the valuation uses the company's own through-the-cycle margins rather than the trough. On that basis Perrigo reads as a value and asset-supported name: the asset-based and relative-multiple methods support the $10.25 price, while the growth and free-cash-flow methods are not meaningful given the negative trailing operating income. The dispersion itself is the message: the value is highly contingent on the recovery.
Inverting the price into the assumption it embeds, the market is paying about 30 times normalized mid-cycle operating income, which implies roughly 10.5% operating-profit growth per year for five years at a 7% cost of capital. Against the company's own history that pace is within range, and historically about 56% of comparable fast-growers sustained it for five years. The sensitivity is high, with each one-point move in the cost of capital shifting the implied growth by about 9.3 points, so the read is fragile.
The honest conclusion is that Perrigo is a leveraged turnaround whose valuation hinges almost entirely on the margin recovery and debt reduction playing out. If they do, the normalized earnings justify the price and the high dividend yield is a bonus. If they do not, the thin margins, heavy debt, and declining core sales make the asset support softer than it looks, and the dividend is at risk. This is a deep-value, high-risk situation, not a stable income name despite the headline yield.
Catalysts
The near-term catalysts are the second-half recovery and the deleveraging. First-quarter 2026 adjusted EPS of $0.43 beat the $0.32 consensus, though revenue of $969.2 million missed and core sales fell 8.3%. Management reaffirmed full-year EPS guidance of $2.00 to $2.30 and framed the first-half headwinds, a soft cough-and-cold season and carryover manufacturing issues, as transitory and expected to lap in the second half. Whether that second-half improvement materializes is the single most important swing for the year.
Capital allocation is the second driver. The post-quarter sale of the Dermacosmetics business for €305.6 million provides proceeds for debt reduction against the $3.6 billion load, and the Project Energize and Supply Chain Reinvention restructuring programs continue to deliver cost savings, with run-rate benefits of $157 million reported late in 2025. Further asset sales or accelerated debt paydown would be incremental positives, while the roughly 11% dividend yield keeps the sustainability of the payout in focus.
The risks to watch are continued core-sales declines, retailer promotional behavior, floating-rate debt cost, and the durability of the dividend. Analyst sentiment is mixed, with a small Buy lean offset by target cuts, including JPMorgan lowering its target into the mid-teens. The stock will trade on evidence that margins are recovering and debt is falling; absent that, the high yield reads as a warning rather than an opportunity.
Sources:
- https://www.stocktitan.net/news/PRGO/perrigo-reports-first-quarter-2026-financial-results-from-continuing-tjmg6i23bzxw.html
- https://www.investing.com/news/company-news/perrigo-q1-2026-slides-eps-beats-amid-market-softness-shares-gain-93CH-4664184
- https://www.fool.com/earnings/call-transcripts/2026/05/07/perrigo-prgo-q1-2026-earnings-transcript/
- https://www.benzinga.com/quote/PRGO/analyst-ratings
- https://stockanalysis.com/stocks/prgo/ratings/
Peer Cohorts (Per Segment, With Filing Citations)
Consumer Self-Care Americas / Consumer Self-Care International (reported)
- PBH (PRESTIGE CONSUMER HEALTHCARE INC.)
- FY2025 10-K: OTC healthcare products in the following product groups: Analgesics, Cough & Cold, Women's Health, Gastrointestinal, Eye & Ear Care, Dermatologicals and Oral Care. Our products are distinct and separately identifiable on customer contracts or invoices, with each product sale representing a separate performance…
- FY2025 10-K: …in the continental United States through one facility, which is owned and operated by a third-party provider, since fiscal 2020. This facility provides warehouse services including storage, handling and shipping, as well as transportation services, with respect to our full line of products, including (i) complete…
- BHC (Bausch Health Companies Inc.)
- FY2025 10-K: …among other things, the adoption of uniform standards for the electronic exchange of information in common health care transactions (e.g., health care claims information and plan eligibility, referral certification and authorization, claims status, plan enrollment, coordination of benefits and related information),…
- FY2025 10-K: …negligent misrepresentation, wrongful death, loss of consortium and/or punitive damages. The damages sought include compensatory damages, including medical expenses, lost wages or earning capacity, loss of consortium and/or compensation for pain and suffering, mental anguish anxiety and discomfort, physical…
- OGN (Organon & Co.)
- FY2025 10-K: …of sale. In addition, revenues are recorded net of time value of money discounts if collection of accounts receivable is expected to be in excess of one year. Chargebacks are discounts that occur when a contracted customer purchases through an intermediary wholesaler. The contracted customer generally purchases…
- FY2025 10-K: …Planned Parenthood); • changes in Medicaid or other reimbursement practices; • uncertainty of the development of a market for such products; • trends relating to, or the introduction or existence of, competing products, technologies or alternative treatments or -34- Table of Contents therapies that may be more…
- VTRS (Viatris Inc)
- FY2025 10-K: …compliance with environmental laws, this is not expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our operations or competitive position. Viatris remains engaged in promoting environmentally responsible and sustainable supply chains,…
- FY2025 10-K: …2024-12-31 0001792044 vtrs:ThreeCustomersMember us-gaap:CreditConcentrationRiskMember us-gaap:AccountsReceivableMember 2025-01-01 2025-12-31 0001792044 vtrs:ThreeCustomersMember us-gaap:CreditConcentrationRiskMember us-gaap:AccountsReceivableMember 2024-01-01 2024-12-31 0001792044…
- AMRX (AMNEAL PHARMACEUTICALS, INC.)
- FY2025 10-K: The complaint purported to plead, on behalf of a nationwide class and California subclass, the following counts: breach of warranty; unjust enrichment; fraud; and violation of California's Unfair Competition Law. The complaint sought damages, including punitive damages, restitution, other equitable monetary relief,…
- FY2025 10-K: …country:US amrx:SpecialtySegmentMember 2025-01-01 2025-12-31 0001723128 amrx:OtherTherapeuticClassesMember country:US amrx:SpecialtySegmentMember 2024-01-01 2024-12-31 0001723128 amrx:OtherTherapeuticClassesMember country:US amrx:SpecialtySegmentMember 2023-01-01 2023-12-31 0001723128…
- TEVA (TEVA PHARMACEUTICAL INDUSTRIES LIMITED)
- FY2025 10-K: …adversely affected by the concentration of our customer base and commercial alliances among our customers. A significant portion of our sales are made to relatively few U.S. retail drug chains, wholesalers, managed care purchasing organizations, mail order distributors and hospitals. These customers have undergone…
- FY2025 10-K: …terms with customers, historical experience, and projected market conditions in the U.S.; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management's significant assumptions related to open claims for Medicaid, wholesaler inventory levels and expected…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.