- Perrigo Co.’s (PRGO) stock rose 22.05% to $29.25 after Q4 2024 earnings of $0.93 per share beat the $0.92 consensus, though revenues dropped 1.6% to $1.14 billion, missing the $1.19 billion forecast.
- The company forecasts FY25 EPS of $2.90 – $3.10 versus a $3.01 consensus and revenues of $4.42-$4.51 billion (up 1-3%) against $4.62 billion expected, with 2025 – 2027 targets including a 2.5% – 4.5% organic net sales CAGR and 200-400 basis point gross margin growth.
- Perrigo’s business model leverages store brands and infant formula for cash flow, supporting high-growth brands, with a global supply chain of 100+ molecules and 100% price coverage driving innovation and a goal of net leverage below 3x adjusted EBITDA by 2027.
Perrigo Co.’s (PRGO) stock surged 22.05% to $29.25 on Friday, peaking at $29.51, driven by its Q4 and fiscal year 2024 financial results, where it reported earnings of $0.93 per share – beating the $0.92 consensus by $0.01 – despite a 1.6% revenue drop to $1.14 billion, falling short of the $1.19 billion expected. The consumer self-care products provider outlined a robust long-term vision for 2025 – 2027, targeting an organic net sales CAGR of 2.5% to 4.5%, adjusted gross margin growth of 200 to 400 basis points, and adjusted operating margin expansion of 150 to 250 basis points by 2027, alongside a high-single to low-double digit EPS CAGR and a net leverage below 3x adjusted EBITDA. For FY25, Perrigo projects EPS of $2.90 to $3.10 against a $3.01 consensus, with revenues of $4.42 to $4.51 billion – up 1-3% year-over-year but below the $4.62 billion forecast – reflecting a cautious yet strategic outlook.
The company’s strength lies in its complementary business model, leveraging store brands and infant formula to fuel cash flow for high-growth brands, while its global supply chain, handling over 100 molecules and achieving 100% consumer price point coverage, maximizes reach and efficiency. This structure supports Perrigo’s ambitious financial targets, including operating cash flow conversion to adjusted net income of 100% or more and free cash flow as a percentage of net sales rising by approximately 200 basis points by 2027, reinforcing its capacity to reinvest in innovation and branding. Despite the Q4 revenue miss, the market’s enthusiastic response – lifting shares by $5.32 – signals confidence in Perrigo’s ability to harness its scale, with 100-plus molecules and consumer-led innovation driving demand across brands, store brands, and geographies, positioning it as a resilient player in the self-care sector.
Perrigo’s guidance reflects a blend of pragmatism and ambition, acknowledging near-term revenue challenges while setting the stage for sustained growth through 2027, with adjusted EPS growth and margin expansion as key pillars. The company’s focus on stronger customer partnerships through branding and innovation, paired with its cash-generating base, offers a clear path to achieving its projected $4.42 to $4.51 billion in FY25 revenues and beyond. Friday’s 22%-plus stock rally underscores investor faith in this strategy, even as Perrigo navigates a competitive landscape, leveraging its unique ecosystem to serve the broadest consumer base while scaling profitability and operational efficiency.
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