Evaluating the Legal and Financial Risks Facing Perrigo Company plc (PRGO) in the Wake of Multiple Securities Lawsuits

Perrigo Company plc (PRGO) has become a focal point in the securities litigation landscape, with ongoing lawsuits alleging material misrepresentations and operational failures tied to its acquisition of Nestlé's infant formula business. These legal challenges, coupled with significant financial underperformance and strategic uncertainty, raise critical questions about the company's governance, valuation, and long-term investor confidence. This analysis examines the material risks posed by the litigation and their implications for Perrigo's stock and corporate strategy.

Legal Allegations and Operational Failures

A class-action lawsuit, French v. Perrigo Company plc, No. 25-cv-09596 (S.D.N.Y.), according to legal filings. The lawsuit claims the company failed to disclose that the facility required substantial capital expenditures and faced manufacturing challenges, leading to overstated financial results. Key disclosures, including a $35–45 million remediation cost in February 2024, , , underscore the severity of these issues. , compounding investor skepticism.

Financial Impact and Valuation Concerns

Perrigo's financial performance has deteriorated sharply since 2023. The infant formula business, which accounts for 90% of its Nutrition category but less than 10% of total revenue, has dragged on profitability, according to investor reports. As of late 2025, , , reflecting market concerns over operational risks and capital allocation. Analysts question whether the stock has fully priced in the long-term costs of remediation and potential divestment of the underperforming segment according to market analysis.

Governance and Strategic Uncertainty

Despite the legal and financial turmoil, Perrigo has not seen executive resignations or board changes directly linked to the 2025 lawsuit disclosures according to corporate filings. However, the company has initiated a strategic review of the infant formula business under its "Three-S" (Stabilize, Streamline, Strengthen) plan, with CEO emphasizing disciplined capital allocation and portfolio optimization according to investor updates. Recent governance actions include a November 2025 dividend declaration and a restructuring plan appointing as Chief Commercial Officer to centralize global brand-building capabilities according to press releases. These moves aim to enhance agility but remain untested in addressing the core challenges of the infant formula division.

Investor Confidence and Legal Risks

The lawsuits have eroded investor confidence, with lead plaintiff motions due by January 16, 2026 according to legal filings. Law firms such as Kirby McInerney and Robbins Geller are actively representing shareholders, highlighting the potential for a protracted legal battle and significant settlement costs. demonstrates Perrigo's vulnerability to securities litigation. The outcome of the current case could further strain financial resources and deter institutional investors, particularly if the court rules that executives engaged in intentional misrepresentation.

Strategic Pivots and Future Outlook

Perrigo's strategic review of the infant formula business may lead to divestment or repositioning, though no decisions have been finalized according to investor statements. The company's focus on its core over-the-counter (OTC) health and wellness products could mitigate some risks, but the infant formula segment's drag on margins and cash flow remains a critical concern. Investors must weigh the potential for operational turnaround against the likelihood of continued legal and regulatory scrutiny.

Conclusion

The securities lawsuits against Perrigo Company plc represent a material risk to its financial stability and investor value. The alleged misrepresentations, coupled with operational underperformance and strategic uncertainty, have triggered sharp stock price declines and heightened legal exposure. While governance actions and restructuring efforts aim to stabilize the business, the resolution of the ongoing litigation and the outcome of the infant formula business review will be pivotal in determining Perrigo's long-term trajectory. Investors should closely monitor these developments and assess whether the company can effectively address its operational and legal challenges.