Research · Sep 3, 2026
[PRGO] Perrigo Thesis 2026: Private-Label OTC Margin Recovery vs. Leverage Burden
Perrigo FY2025 adj. EBITDA recovered to ~$650M at ~16% margin (from FY2023 trough of ~12.3%) as CSCA pricing actions and infant formula category normalization restored profitability. Net debt reduced to ~$4.1B (from peak ~$5.3B FY2022) — annual debt repayment ~$500M. FY2026 thesis: continued margin recovery toward 17-18% as contract renegotiations capture value of branded OTC price increases (private-label price points adjust upward); CSCA infant formula category fully normalizing; deleveraging toward ~5.5x net leverage by FY2027; key risks: retailer concentration (Walmart/CVS) limits pricing power, Irish tax dispute resolution, branded OTC consumer healthcare margin pressure.