Please ensure Javascript is enabled for purposes of website accessibility

Why Perrigo Shares Are Jumping Today

By Keith Speights - Jan 14, 2020 at 3:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors responded positively to the drugmaker's sneak peek at its Q4 and full-year results.

What happened

Shares of Perrigo (PRGO 1.49%) are jumping 11.7% higher as of 3:17 p.m. EST on Tuesday. The big gain came after the drugmaker announced preliminary financial results for fiscal year 2019. Perrigo expects to report net sales of $4.8 billion for the full year, up 2% year over year and a little higher than the consensus Wall Street estimate of $4.77 billion. 

So what

The main thing that excited investors was that Perrigo's turnaround efforts appear to be on track. Without the impact of foreign exchange headwinds, the drugmaker's growth would have been even better. Perrigo stated that its adjusted net sales grew by 6% year over year on a constant-currency basis.

Hand holding magnifying glass up to charts

Image source: Getty Images.

Perrigo CEO Murray Kessler stated:

We are pleased to see the business responding to our transformation efforts. While we have only completed the first year of our 2 to 3-year transformation journey, the revenue growth we have seen in the second half indicates that we are on the right track. The third quarter was strong. The fourth quarter was outstanding. All business segments delivered stellar fourth quarter net sales results with strong organic growth.

The company's consumer self-care Americas segment delivered the most impressive growth, with fourth-quarter net sales jumping more than 15% year over year. The consumer self-care international segment generated 8% year-over-year sales growth. Fourth-quarter net sales for Perrigo's pharmaceutical segment increased by 3% over the prior year.

Now what

Perrigo gave the sneak peek today in advance of its presentation at the annual J.P. Morgan Healthcare Conference. The conference is typically a huge week for healthcare stocks, with companies choosing to make major announcements to get the most publicity. 

Although Perrigo won't report its actual fourth-quarter and full-year 2019 results until late February, the preliminary numbers announced today should be very close to the final figures. Perrigo's progress indicates that it should be on track for another year of single-digit-percentage revenue growth in 2020.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Perrigo Company plc Stock Quote
Perrigo Company plc
$38.14 (1.49%) $0.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.