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Why Is Perrigo (PRGO) Up 0.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Perrigo (PRGO - Free Report) . Shares have added about 0.9% 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 catalysts.

Perrigo Q4 Earnings Beat Estimates, Sales In Line

Perrigo reported fourth-quarter 2021 adjusted earnings of 60 cents per share, which beat the Zacks Consensus Estimate of 56 cents. Earnings increased 27.7% year over year due to higher revenues, partially offset by higher cost to overcome supply chain disruption.

Net sales increased 4.9% year over year to $1.1 billion, in line with the Zacks Consensus Estimate. The year-over-year increase was driven by a strong rebound in sales of cough/cold products, additional sales from new products and higher net price realization. These were partially offset by a loss of sales from discontinued products and unfavorable currency movements. Organic net sales were up 5.5% year over year.

Segment Discussion

CSCA: Net sales of the segment in the fourth quarter of 2021 came in at $736 million, up 5% year over year. Sales increased due to a strong rebound in cough/cold sales and higher sales of Upper Respiratory, Pain & Sleep-Aids, Nutrition, and Vitamins, Minerals, and Supplements products. This was partially offset by lower sales from Skincare & Personal Hygiene, Healthy Lifestyle and Oral Care products.

CSCI: The segment reported net sales of $369 million, up 4.6% from the year-ago period. Organically sales increased 6.4%. Sales were driven by skincare, digestive health and cough/cold products partially offset by lower sales of products from Oral Care, Healthy Lifestyle, Pain & Sleep-Aids and VMS categories.

Full-Year Results

Perrigo reported revenues of $4.1 billion, up 1.2% year over year. Net sales declined 0.7% organically. The company reported adjusted earnings of $2.06 per share for 2021, down 11.6% from the year-ago period.

2022 Guidance

Perrigo issued its earnings and revenue guidance for 2022. The company expects adjusted earnings per share to be in the range of $2.10 to $2.30. It expects revenues in 2022 to grow by 3.5% to 4.5%.

Perrigo expects to complete the previously announced acquisition of HRA Pharma in June 2022. The company expects the products added following the completion of the acquisition to bring additional sales of $170-$190 million. It expects the acquisition to add 30 cents to the guided earnings range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -15.33% due to these changes.

VGM Scores

At this time, Perrigo has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision 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.


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