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Perrigo Company (PRGO) Q1 Earnings: Disappointment in Store?

Zacks Equity Research
Updated

Perrigo Company plc PRGO is expected to report first-quarter 2017 results later this month. The company did not report earnings results for the fourth quarter of 2016. However, in the other three quarters the company had a mixed track record as it beat expectations in two of the last three quarters and missed the same in one. Overall, the company has an average positive earnings surprise of 0.48%.

Perrigo Company Price and EPS Surprise

 

Perrigo Company Price and EPS Surprise | Perrigo Company Quote

Perrigo’s shares have lost 12.2% so far this year, while the Zacks classified Medical Products industry witnessed an increase of 14.4%.



Let’s see how things are shaping up at the company this quarter.

Factors Influencing This Quarter

Price erosion and changing market dynamics across the Prescription Pharmaceuticals (Rx) business is likely to continue hurting the company’s performance. Focus on drug pricing is another concern.

Meanwhile, the Branded Consumer Healthcare (BCH) segment continues to be impacted by market dynamics in countries like Belgium, France, Germany and Italy. The BCH segment is projected to underperform due to lower-than-expected revenues from certain high-margin products. Moreover, delay in new product launches and softness in pricing in the Consumer Healthcare segment are expected to continue affecting the segment’s performance.

However, the OTC business and the infant nutrition category within the Consumer Healthcare (CHC) segment as well as product acquisitions and new products in the Rx segment are expected to boost sales in the coming quarter.

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Earnings Whispers

Our proven model does not conclusively show that Perrigo is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Perrigo is -4.00% as the Most Accurate estimate pegged at 96 cents per share and the Zacks Consensus Estimate pegged at $1.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Perrigo currently carries a Zacks Rank #5 (Strong Sell). As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement.

Stocks that Warrant a Look

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Editas Medicine, Inc. EDIT is expected to release results on May 15. The company has an Earnings ESP of +32.26% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cidara Therapeutics, Inc. CDTX is expected to release results on May 11. The company has an Earnings ESP of +1.14% and a Zacks Rank #3.

Aurinia Pharmaceuticals Inc. AUPH is expected to release results on May 10. The company has an Earnings ESP of +10.00% and a Zacks Rank #3.

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Perrigo Company (PRGO): Free Stock Analysis Report
 
Cidara Therapeutics, Inc. (CDTX): Free Stock Analysis Report
 
Editas Medicine, Inc. (EDIT): Free Stock Analysis Report
 
Aurinia Pharmaceuticals Inc (AUPH): Free Stock Analysis Report
 
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