Perrigo Plummets 22.6%: Strategic Shifts and Earnings Volatility Spark Investor Anxiety

Summary
• Perrigo (PRGO) slumps 22.6% intraday, trading at $15.625 after opening at $16.995
• Q3 earnings beat estimates by 6.67% but revenue missed by 4.84%, signaling mixed performance
• Strategic review of Infant Formula business and $360M segment drag fuel sell-off

Perrigo’s stock has plunged to session lows amid a strategic overhaul and earnings volatility. The company’s Q3 results revealed a $0.8 EPS beat but a $1.04B revenue miss, while management announced a strategic review of its Infant Formula division. With the stock trading 22.6% below its previous close, investors are grappling with a bearish technical setup and a Zacks Rank 4 (Sell) outlook.

Strategic Divestitures and Revenue Pressures Drive Sharp Decline
Perrigo’s 22.6% intraday drop stems from a confluence of strategic and operational headwinds. The company announced a strategic review of its Infant Formula business, which contributed a 2.8% drag on Q3 organic sales. Despite a 6.67% earnings surprise, revenue fell short by 4.84%, reflecting soft OTC demand and divestiture impacts. Management’s decision to reassess a $240M capital investment in the segment, coupled with a Zacks Rank 4 (Sell) rating, has triggered a liquidity-driven selloff. The stock’s 52-week low of $15.5 aligns with its current price, amplifying bearish sentiment.

Pharma Sector Stabilizes as Perrigo Faces Unique Strategic Headwinds
The broader pharmaceutical sector remains relatively stable, with Johnson & Johnson (JNJ) down just 0.65% intraday. However, Perrigo’s decline is not sector-driven but rather a reflection of its specific challenges. While peers like AbbVie and Gilead have raised revenue guidance, Perrigo’s focus on portfolio rationalization—exiting non-core segments like Infant Formula—has created a divergence. The company’s 52-week low and negative leverage ratio (-72.6x) underscore its underperformance relative to the Zacks Medical - Products industry, which ranks in the bottom 40% of 250+ sectors.

Bearish Technicals and High-Leverage Puts: Strategic Options for Volatile Conditions
• MACD: -0.370 (below signal line -0.263), RSI: 32.75 (oversold), 200D MA: $25.06 (well above price)
• Bollinger Bands: $20.40–$22.29 (price at lower band), Kline Pattern: Short-term bearish trend

Technical indicators confirm a deep bearish bias. The RSI at 32.75 suggests oversold conditions, while the MACD histogram (-0.107) and 200D MA divergence highlight structural weakness. Key support levels at $15.5 (52W low) and $21.63 (30D support) are critical for near-term direction. The options chain reveals two high-conviction plays:

• PRGO20251121P15 (Put):
- Strike: $15, Expiry: 2025-11-21, IV: 39.71%, Delta: -0.328, Theta: -0.0176, Gamma: 0.2708, Turnover: 2,993
- IV (39.71%): Moderate volatility, Delta (-0.328): Sensitive to price drops, Gamma (0.2708): High sensitivity to price swings
- This put offers 51.78% leverage with strong liquidity (2,993 turnover) and a 275% price change ratio, ideal for a 5% downside scenario (projected payoff: $0.00).

• PRGO20260116P17.5 (Put):
- Strike: $17.5, Expiry: 2026-01-16, IV: 32.11%, Delta: -0.773, Theta: -0.0055, Gamma: 0.1308, Turnover: 15,303
- IV (32.11%): Lower volatility, Delta (-0.773): Deep in-the-money, Gamma (0.1308): Moderate sensitivity
- This contract provides 6.90% leverage with high liquidity (15,303 turnover) and a 309% price change ratio. A 5% downside scenario yields a projected payoff of $1.88, making it a high-probability short-term play.

Aggressive bears should target PRGO20251121P15 for immediate volatility capture, while PRGO20260116P17.5 offers a safer, longer-term hedge.

Backtest Perrigo Stock Performance
It turns out that from January 2022 through today (2025-11-05) Perrigo (PRGO.N) never registered an intraday range of 23 % or more ((high – low) / high ≥ 0.23). Because the event list was empty, the back-testing engine had nothing to evaluate and threw the error you saw.Next steps – please let me know how you would like to proceed:1. Lower the threshold (e.g., 20 %, 15 % or another level) and rerun the analysis so we can capture enough events to study their post-shock behaviour.2. Keep the 23 % requirement but extend the look-back window further into history (before 2022) in case such extreme intraday moves occurred earlier.3. Investigate a different type of price shock (e.g., single-day close-to-close drawdowns or high absolute volume spikes).Tell me which option (or another idea) you prefer, and I will run the revised test immediately.

Investors on Edge: Key Levels and Strategic Reviews to Watch
Perrigo’s 22.6% drop reflects a perfect storm of strategic overhauls, revenue pressures, and bearish technicals. The stock’s 52-week low and Zacks Rank 4 (Sell) signal a near-term underperformance risk, while the options market highlights high-leverage puts for downside protection. Investors should monitor the $15.5 support level and management’s commentary on the Infant Formula review. Meanwhile, Johnson & Johnson’s -0.65% decline underscores the sector’s relative stability, but Perrigo’s unique challenges demand a cautious stance. Watch for a breakdown below $15.5 or a reversal above $21.63 to gauge the next move.