PRGO

Perrigo ($PRGO) CEO and Executives Signal Strong Buy Near 52-Week Low

09/10/2025 20:24

Perrigo Company plc ($PRGO), the Dublin-based over-the-counter (OTC) pharmaceutical specialist, is sending intriguing signals to investors. Founded in 1887, this global company manufactures health and wellness products available without prescription, known for brands like Compeed, Nasonex, and Prevacid24HR. With a $3 billion market cap, the company primarily supplies private-label OTC products to U.S. retail chains and pharmacies. What's happening at this company right now presents a fascinating signal to investors: Following the stock's plunge to the $21-23 range in August, CEO Patrick Lockwood-taylor and multiple executives have been aggressively buying shares. Starting with the CEO's $99,782 purchase of 4,460 shares at $22.37 on August 8, this was followed by EVP Eduardo Bezerra's $68,207 purchase on August 19, EVP Robert Willis's buy on August 22, and continued executive purchases on September 5 and 8. This concentrated insider buying contrasts sharply with 2024 patterns. Last August, then-CEO Svend Andersen executed a massive $964,831 sale, while EVP Ronald Janish also disposed of $382,246 worth of shares during the same period. But this year tells a completely different story. Following Director Geoffrey Parker's $94,850 purchase signal in May, the August-September executive buying spree has been remarkable. The aggressive insider buying appears driven by management's assessment that current share prices represent significant undervaluation. Perrigo stock peaked at $28 in late February 2025 before declining steadily to current levels around $22, near its 52-week low of $21.03, representing substantial correction from last June's $26 levels. The direct catalyst for the decline was disappointing Q2 results announced August 6. Revenue of $1.06 billion missed analyst estimates of $1.087 billion, and conservative annual guidance adjustments disappointed investors. Adding to near-term headwinds, Teamsters union workers launched a strike on September 5, raising concerns about potential production disruptions. However, the financial health picture tells a different story. Perrigo maintains solid fundamentals with $4.33 billion in annual revenue and robust cash flow generation. Levered free cash flow of $775.6 million demonstrates strong cash-generating capabilities. While the debt-to-equity ratio of 86.47% appears elevated, the current ratio of 2.32x indicates no short-term liquidity issues. Adjusted EPS shows improvement trends, and management maintains 2025 adjusted EPS guidance of $2.90-$3.10. Notable business transformation includes the Consumer Self-Care International segment now contributing over 40% of total sales with mid-single-digit revenue growth and double-digit operating income growth. The company is also addressing tariff pressures through U.S. production expansion and supply chain diversification, while Project Energize has achieved $159 million in annual cost savings. The key insight for investors is that insider purchases are concentrated in the $22-24 range, suggesting management views these levels as attractive entry points. The CEO's direct purchase particularly signals strong confidence in company prospects. Near-term variables include union strike resolution and Q3 results. Extended strikes could negatively impact production and results, but quick resolution might provide relief rally potential. Medium to long-term, tariff mitigation effectiveness and international business expansion will be key to share price recovery. Analyst price targets average around $27, suggesting 20%+ upside potential from current levels. The forward P/E of 6.79x compares favorably to the industry average of 18x, indicating valuation appeal. However, high leverage and tariff risks remain concerns. In conclusion, Perrigo appears oversold due to near-term headwinds while management aggressively signals buying opportunity. Current prices around $22 seem to reflect significant discount to management's assessed fair value, presenting potential rebound momentum upon strike resolution and earnings improvement.