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    Securities Suits Over Infant Formula Unit Might Change The Case For Investing In Perrigo (PRGO)

    Simply Wall St·12/08/2025 02:13:04
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    • Perrigo is facing multiple securities class action lawsuits after investors alleged the company misled the market about the value, investment needs, and manufacturing quality of its acquired infant formula business, following disappointing results and a strategic review that deemed the unit less central.
    • The core allegation is that Perrigo understated the capital and operational demands of the Nestlé infant formula acquisition, potentially inflating reported performance and now forcing a reassessment of how this business fits within the broader self-care portfolio.
    • We’ll now explore how the alleged underinvestment and manufacturing deficiencies in Perrigo’s infant formula unit could reshape its investment narrative.

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    Perrigo Investment Narrative Recap

    Perrigo’s story still rests on the idea that a focused, cost-efficient self-care platform can turn consistent demand for OTC and store-brand products into improving profitability. The infant formula lawsuits and weaker outlook put that thesis under pressure in the near term, as they touch both on the most important short term catalyst (stabilizing nutrition and cash flow) and the biggest risk today: execution and credibility around the infant formula acquisition.

    The November 5, 2025 announcement, where Perrigo cut its 2025 net sales outlook to negative 2.5% to negative 3.0% and launched a strategic review of the infant formula unit, is central to this. It directly links the alleged underinvestment and manufacturing issues to softer financial performance, and raises questions about how much of management’s turnaround and cost-savings plan can be realized without more disruption to the portfolio or additional capital needs.

    Yet investors should be aware that if infant formula quality or investment concerns extend beyond what is currently disclosed, the impact on...

    Read the full narrative on Perrigo (it's free!)

    Perrigo’s narrative projects $4.6 billion revenue and $183.6 million earnings by 2028. This requires 1.7% yearly revenue growth and a $243.1 million earnings increase from -$59.5 million today.

    Uncover how Perrigo's forecasts yield a $21.50 fair value, a 60% upside to its current price.

    Exploring Other Perspectives

    PRGO Community Fair Values as at Dec 2025
    PRGO Community Fair Values as at Dec 2025

    Four members of the Simply Wall St Community value Perrigo between US$21.50 and about US$58.28, pointing to very different views on upside. Set against allegations that past results were overstated due to underinvestment and manufacturing deficiencies in infant formula, these gaps in expectations highlight why you may want to compare several risk and return scenarios before forming your own view.

    Explore 4 other fair value estimates on Perrigo - why the stock might be worth over 4x more than the current price!

    Build Your Own Perrigo Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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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.