A month has gone by since the last earnings report for Perrigo (PRGO). Shares have added about 19.1% in that time frame, outperforming 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.

Q4 Earnings Top, Sales Lag Estimates

Perrigo reported adjusted earnings of 86 cents per share in the fourth quarter of 2023, beating the Zacks Consensus Estimate of 83 cents. Earnings were up 14.7% year over year. The upside can be attributed to lower operating expenses incurred by the company during the quarter.

Net sales increased 0.1% year over year to $1.16 billion, missing the Zacks Consensus Estimate of $1.19 billion. The upside was driven by growth stemming from the acquisition of the U.S. & Canadian Good Start infant formula brand and favorable currency movement, partially offset by a decline in organic net sales.

During the quarter, sales rose 1.4% on account of favorable currency movement. At constant currency (excluding foreign currency translation), sales fell 1.2%. Organic net sales (excluding the effects of acquisitions and divestitures and the impact of currency) were down 0.6% year over year.

Segment Discussion

CSCA: The segment’s net sales in the fourth quarter of 2023 came in at $744.4 million, down 2.8% year over year. The downside was caused by purposeful SKU prioritization actions to enhance margins as part of the company's Supply Chain Reinvention Program undertaken in 2022 and lower net sales of Nutrition and Oral Care products in the United States.

CSCI: The segment reported net sales of $412.6 million, up 5.9% from the year-ago period’s levels. Segment revenues benefited from favorable currency movement and higher net sales of Pain & Sleep-Aids and VMS products. At constant-currency (cc) rates, sales were up 1.8% year over year. Organically, sales increased 2.9%.



Full-Year Results

Perrigo reported revenues of $4.66 billion, up 4.6% year over year. Net sales also rose 1.7% organically. The company reported adjusted earnings of $2.58 per share for 2023, up 24.6% year over year.

2024 Guidance

Perrigo issued fresh financial guidance for 2024. Management expects total net sales growth to be flat year over year. Adjusted earnings per share (EPS) are expected to be between $2.50 and $2.65.

The adjusted tax rate is expected to be around 20.5%. Perrigo expects to record interest expenses of about $180 million.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -63.82% due to these changes.

VGM Scores

Currently, Perrigo has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 these revisions indicates a downward shift. It's no surprise Perrigo has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Perrigo belongs to the Zacks Medical - Products industry. Another stock from the same industry, Bio-Rad Laboratories (BIO), has gained 5.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

Bio-Rad reported revenues of $681.18 million in the last reported quarter, representing a year-over-year change of -6.7%. EPS of $3.10 for the same period compares with $3.31 a year ago.

Bio-Rad is expected to post earnings of $2.09 per share for the current quarter, representing a year-over-year change of -37.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -12.2%.

Bio-Rad has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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