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What's in Store for Perrigo (PRGO) This Earnings Season?

Investors are likely to focus on Perrigo Company plc’s PRGO plans for growth, after its pending transformation into a pure self-care company later this year on the first-quarter 2021 earnings call.

Perrigo’s earnings performance has been mixed over the trailing four quarters. The company’s earnings beat estimates in three of the last four quarters and missed the same once, delivering an average surprise of 6.44%.

Shares of Perrigo have lost 4.7% so far this year against the industry‘s increase of 9.1%.

In the last reported quarter, Perrigo delivered a negative earnings surprise of 7.92%.

Factors at Play

In the first quarter, the performance of Perrigo’s Consumer Self Care Americas (“CSCA”) and Consumer Self Care International (“CSCI”) segments is expected to have been aided by the products added following the acquisition of Ranir Global Holdings.

Meanwhile, new products have been witnessing significant sales growth.Oral Care assets of High Ridge Brands acquired in April are likely to have boosted sales in the soon-to-be reported quarter. Moreover, the launch of store brand equivalent of over-the-counter Voltaren arthritis pain drug in September 2020 is likely to have brought additional revenues during the quarter.

However, sales of cough/cold products are likely to have been adversely impacted by COVID-19 and dented the top line significantly.

Loss of sales from the recall of albuterol sulfate inhalation aerosol, discontinued products and exited business, especially its Animal Health business sold to PetIQ PETQ, might have offset the gain from the new products.

The COVID-19 pandemic boosted demand for Perrigo’s certain products in 2020, driving revenues. However, it hurt products of some segments. However, the extent of the impact of the pandemic on the first-quarter results remains to be seen.

Higher sales of new products in the Rx segment and continued moderation of pricing pressure in the generics industry are likely to have driven segment sales. However, discontinued products and lower sales of cough/cold products are likely to have hampered this segment’s revenues.

Meanwhile, the favorable impact cost savings due to ongoing restructuring initiatives and operating expense discipline are likely to have boosted the bottom line.

Investors will likely be keen to know more about the impact of pricing pressure and COVID-19 on the first-quarter earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Perrigo in this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.

Earnings ESP: Perrigo has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 56 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Perrigo carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Perrigo Company plc Price and EPS Surprise

Perrigo Company plc Price and EPS Surprise
Perrigo Company plc Price and EPS Surprise

Perrigo Company plc price-eps-surprise | Perrigo Company plc Quote

Stocks to Consider

Here are two biotech stocks that have the right combination of elements to beat on earnings this time around.

Avenue Therapeutics, Inc. ATXI has an Earnings ESP of +16.67% and a Zacks Rank #2.

Pacira BioSciences, Inc. PCRX has an Earnings ESP of +3.80% and a Zacks Rank of 2.

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Perrigo Company plc (PRGO) : Free Stock Analysis Report

Pacira BioSciences, Inc. (PCRX) : Free Stock Analysis Report

PetIQ, Inc. (PETQ) : Free Stock Analysis Report

Avenue Therapeutics, Inc. (ATXI) : Free Stock Analysis Report

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