Perrigo Navigates Choppy Waters: A Deep Dive Into the Self-Care Giant’s Outlook
Perrigo Company PLC, a familiar name behind many of the everyday products in your medicine cabinet, is currently in the middle of a significant corporate transformation. Having strategically jettisoned its generic pharmaceuticals and animal health segments, the company is now laser-focused entirely on the booming world of consumer self-care. This strategic pivot aims to solidify its standing as a global leader in over-the-counter (OTC) health and wellness.
The core of Perrigo’s business model rests on two pillars: store-brand dominance in North America and powerful national brands overseas. If you’ve ever bought a private-label pain reliever or allergy medication at a major US retailer, chances are Perrigo manufactured it. They are recognized as the largest store brand OTC provider in the United States and a top-ten player in the European OTC market, giving them a significant market position in essential health categories.
On the growth front, the company has several key initiatives underway. Its “Three-S Plan”—stabilizing, streamlining, and strengthening the business—is guiding operational efficiency and portfolio refinement. A major win has been the rollout of Opill, the first FDA-approved over-the-counter daily oral contraceptive in the US, which is driving substantial growth in the women’s health category alongside European brands like EllaOne. Furthermore, the company is targeting low-to-mid-single-digit organic sales growth and has committed to reducing its debt leverage.
However, the journey toward a pure-play self-care model has hit a significant snag. A key 2022 acquisition—Nestlé’s infant formula business—has proven to be a major headwind. The business has required substantial unexpected capital and operational expenditures to address maintenance, production, and facility issues that the company is currently working to remediate.
These difficulties in the infant formula segment forced the company to slash its fiscal year 2025 net sales outlook. The news also sparked a notable drop in the company’s stock price, which in turn has led to a class action securities fraud lawsuit on behalf of investors who allege the company failed to disclose the full extent of the infant formula facility’s problems.
Market analysts are currently split, reflecting the push and pull between a stable core business and the high-profile operational challenges. The consensus rating from the brokerages covering Perrigo is currently “Reduce,” with a mixed collection of Sell, Hold, and a few Buy recommendations. The average twelve-month price target is set around $20.33, indicating that the market is cautious.
Despite the legal and operational pressure from the infant formula segment, Perrigo’s underlying strategy remains rooted in the resilient consumer self-care market. The company is leaning into the strength of its store-brand portfolio and the market potential of its new self-care brands. While the immediate focus is on navigating the infant formula recovery and shoring up investor confidence, the long-term prognosis hinges on its ability to execute its streamlining plan and maximize the success of its flagship self-care products. The next round of earnings reports will offer the clearest indication of whether the core business momentum can overcome the significant setbacks.
