It has been about a month since the last earnings report for Perrigo (
PRGO Quick Quote PRGO - Free Report) . Shares have added about 2.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Perrigo due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Perrigo Q1 Earnings Miss Estimates, Revenues In Line
Perrigo reported first-quarter 2021 adjusted earnings of 50 cents per share, which missed the Zacks Consensus Estimate of 56 cents. Earnings decreased 25.4% year over year.
Net sales decreased 6.8% year over year to $1.01 billion and came in line with the Zacks Consensus Estimate. The year-over-year decline was due to lower worldwide net sales of cough/cold products. Sales in the year-ago quarter had benefited from pandemic-related customer stocking. Organic net sales were down 10.9% year over year.
The company has signed an agreement to divest its generic Rx Pharmaceuticals business to Altaris Capital Partners in March that is expected by the end of the third quarter of 2021. The company reported financial results from the generic Rx pharmaceuticals business as discontinued operations in the first quarter.
CSCA: Net sales of the segment in the first quarter of 2021 came in at $641 million, down 8.6% year over year. Sales decreased as COVID-19 negatively impacted sales of cough/cold products. However, decline in these segments was partially offset by new product sales, sales of products added with Dr. Fresh acquisition, and higher sales in Digestive Health category and Skincare &Personal Hygiene category.
Net sales at CSCA decreased approximately 11.8%, organically.
CSCI: The segment reported net sales of $370 million, down 3.4% from the year-ago period. Sales declined in the CSCI segment as COVID-19 hampered sales of cough/cold, skincare & personal hygiene products. Divested businesses hurt sales by $14 million. However, $26 million in favorable currency movements, higher sales from new products, pain and VMS categories provided some respite. Organic sales decreased 9.1%. 2021 Guidance Intact
Perrigo reiterated its previous guidance for 2021. The company expects to deliver organic net sales growth of 3% in 2021. It expects adjusted earnings to increase approximately 7% and be in the range of $2.50 to $2.70.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
At this time, Perrigo has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Perrigo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.