Perrigo (PRGO) to Report Q4 Earnings: What's in the Cards?
Perrigo Company plc PRGO will report fourth-quarter 2022 results on Feb 27, after market close. In the last reported quarter, the company reported a negative earnings surprise of 15.15%.
Perrigo’s shares have lost 1.4% in the past year compared to the industry’s decline of 35.8%.
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Perrigo’s earnings performance has been dismal over the trailing four quarters. The company’s earnings missed estimates in three of the last four quarters and beat the same once, registering a negative earnings surprise of 7.93% on average.
Perrigo Company plc Price and EPS Surprise
Perrigo Company plc price-eps-surprise | Perrigo Company plc Quote
Let’s see how things have shaped up for this announcement.
Factors at Play
In the fourth 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 products added through its HRA Pharma acquisition. Significant sales growth of new products is likely to have boosted sales further during the soon-to-be-reported quarter. However, currency movements are likely to have an unfavorable impact on the company’s ex-U.S. sales.
Strong demand for cough/cold products globally and higher demand for infant formula in the U.S. are also likely to have boosted the company’s top line in the to-be-reported quarter.
Perrigo reported higher net price realization for its products through strategic price increases during the third quarter. The improving price trend will likely be reflected in the company’s fourth-quarter sales, benefiting the top line.
However, loss of sales due to discontinued products and the exited businesses might have offset the gain from the new products.
To reduce its structural cost base and improve profitability in its operations, management initiated a supply chain reinvention program in 2022. As part of this program, Perrigo announced last November that it made a $170-million strategic investment and bought Nestle’s Gateway infant formula plant to strengthen its infant formula manufacturing in the United States. It also bought the U.S. and Canadian rights to Good Start infant formula and other related brands.
We expect macroeconomic factors like cost headwinds (including the higher cost of goods sold), the rising cost of capital and supply chain disruptions in certain parts of the world amid the Russia-Ukraine war to have hurt the company’s operating margins.
Investors are likely to ask questions about potential product launches this year. We also expect management to provide an update on the expected impact of macroeconomic pressures in 2023.
Earnings Whispers
Our proven model does not predict an earnings beat for Perrigo this time around. 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. Unfortunately, that is not thecase here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Perrigo has an Earnings ESP of 0.00% as the Most Accurate Estimate and Zacks Consensus Estimate both stand at 70 cents per share.
Zacks Rank: Perrigo has a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are a few stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Allogene ALLO has an Earnings ESP of +25.70% and a Zacks Rank #2.
Shares of Allogene have declined 22.6% in the past year. Earnings of Allogene beat estimates in each of the last four quarters, witnessing a trailing four-quarter positive earnings surprise of 9.44%, on average. In the last reported quarter, Allogene’s earnings beat estimates by 6.45%.
Alnylam Pharmaceuticals ALNY has an Earnings ESP of +3.00% and a Zacks Rank #3.
Alnylam Pharmaceuticals’ stock has surged 51.0% in the past year. Alnylam’s earnings missed estimates in each of the last four quarters, delivering a trailing four-quarter negative earnings surprise of 42.61%, on average. In the last reported quarter, Alnylam Pharmaceuticals’ earnings missed estimates and reported an earnings surprise of 78.49%.
Alnylam is scheduled to release fourth-quarter 2022 results on Feb 23, before market open.
argenx ARGX has an Earnings ESP of +3.17% and a Zacks Rank #3.
argenx’s stock has risen 33.7% this past year. argenx’s earnings beat estimates in three of the last four quarters and missed the mark on one occasion, delivering a trailing four-quarter earnings surprise of 3.68%, on average. In the last reported quarter, argenx’s earnings missed estimates and reported a negative earnings surprise of 21.71%.
argenx is scheduled to release fourth-quarter 2022 results on Mar 2.
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Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report
Perrigo Company plc (PRGO) : Free Stock Analysis Report
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Allogene Therapeutics, Inc. (ALLO) : Free Stock Analysis Report
