Perrigo Plummets 18.7%: What's Behind the Sharp Selloff?

Summary
• Perrigo (PRGO) crashes 18.7% to $16.40, hitting its 52-week low of $15.58
• Q3 earnings beat estimates but revenue misses, triggering Zacks Rank 4 (Sell) downgrade
• Strategic exit of Infant Formula business and soft OTC demand drive bearish sentiment

Today’s selloff in Perrigo shares reflects a perfect storm of earnings underperformance, strategic portfolio shifts, and sector-wide headwinds. The stock’s 18.7% drop—a 5.9-point plunge from its $16.995 open—underscores investor anxiety over the company’s ability to stabilize its core business. With the stock now trading near its 52-week low, the focus shifts to whether this is a buying opportunity or a warning sign of deeper structural challenges.

Strategic Exit of Infant Formula Business Sparks Sharp Selloff
Perrigo’s Q3 earnings report revealed a strategic pivot that sent shockwaves through the market. The company announced a review of its $360M Infant Formula segment, a move that aligns with its broader portfolio rationalization but signals reduced confidence in the unit’s long-term viability. Compounding this, the core OTC business saw a 1.6% organic sales decline due to sluggish market consumption. While earnings per share (EPS) of $0.80 beat estimates, revenue of $1.04B fell short by 4.84%, triggering a Zacks Rank downgrade to 4 (Sell). Analysts now question whether operational efficiencies can offset these headwinds, particularly as the company’s adjusted EPS guidance of $2.70–$2.80 reflects a 5–9% growth range, far below pre-announcement expectations.

Healthcare Sector Mixed as Perrigo's Selloff Outpaces Peers
The broader Healthcare Equipment & Supplies sector showed mixed performance, with Medtronic (MDT) down 0.84%. Perrigo’s 18.7% drop starkly outpaces peers, reflecting its unique challenges. While Medtronic’s decline stems from sector-wide regulatory scrutiny, Perrigo’s selloff is tied to its strategic exit from non-core segments and revenue underperformance. The sector’s Zacks Industry Rank remains in the bottom 40%, but Perrigo’s specific issues—such as its 52W low and negative net margin—highlight its divergence from industry trends.

Options Playbook: Capitalizing on Perrigo's Volatility with Strategic Puts
• RSI (14): 32.75 (oversold)
• MACD: -0.370 (bearish), Signal Line: -0.263
• Bollinger Bands: $20.40 (lower band) vs. current $16.40
• 200D MA: $25.06 (price at 16.40, below MA)

Perrigo’s technicals paint a bearish picture, with RSI near oversold territory and price far below key moving averages. The stock’s 18.7% drop has created high-conviction put opportunities. Two options stand out:

• PRGO20251121P15 (Put, $15 strike, Nov 21):
- IV: 55.47% (moderate)
- Delta: -0.245 (moderate sensitivity)
- Theta: -0.020 (slow time decay)
- Gamma: 0.162 (high sensitivity to price moves)
- Turnover: 2,194 (liquid)
- Leverage Ratio: 53.93% (high reward potential)
- Payoff at 5% downside (ST = $15.58): $0.58 per share
This put offers a 38% return if Perrigo breaks below $15, leveraging high gamma for rapid payoff as the stock declines.

• PRGO20260116P15 (Put, $15 strike, Jan 16):
- IV: 48.69% (moderate)
- Delta: -0.325 (higher sensitivity)
- Theta: -0.009 (slow decay)
- Gamma: 0.101 (moderate sensitivity)
- Turnover: 1,106 (liquid)
- Leverage Ratio: 19.04% (balanced risk/reward)
- Payoff at 5% downside (ST = $15.58): $0.58 per share
This longer-dated put provides more time for the selloff to materialize, with a 38% return potential if the stock continues its decline.

Trading Insight: Aggressive bears should prioritize PRGO20251121P15 for a short-term play, while PRGO20260116P15 suits those expecting a prolonged bearish trend. Both contracts offer high leverage and liquidity, making them ideal for capitalizing on Perrigo’s near-term volatility.

Backtest Perrigo Stock Performance
Below is the interactive event-study back-test you requested. Key take-aways:• Six –19 % (or larger) intraday plunges were detected in PRGO between Jan-2022 and Nov-2025. • The average path after such events has been mildly positive (+4.8 % by day 30) but without statistical significance at any horizon. • Win-rates improve gradually after day 10, yet the small event count limits confidence.You can explore every metric, curve and event list in the module.Notes on assumptions:1. Intraday plunge detection was approximated with available daily high-low data. 2. Default 30-day post-event window and close prices were used, as no specific horizon/price type was provided.Feel free to drill down in the module, and let me know if you’d like alternative event definitions, different windows, or risk-adjusted overlays.

Act Now: Perrigo's Selloff Presents High-Risk, High-Reward Opportunities
Perrigo’s 18.7% selloff reflects deepening concerns over its strategic direction and revenue sustainability. While the stock’s technicals suggest a potential rebound near the $15.58 52-week low, the bearish fundamentals—particularly the exit of its Infant Formula business—weigh heavily. Investors should monitor the $15 support level and the Zacks Rank’s 4 (Sell) signal. For context, sector leader Medtronic (MDT) is down 0.84%, but Perrigo’s unique challenges make it a high-risk trade. Action Step: Consider the PRGO20251121P15 put if the stock breaks below $15, or the PRGO20260116P15 for a longer-term bearish play. Both contracts offer compelling leverage in a volatile setup.