Perrigo hit with new securities class action, adding to litigation overhang but not yet thesis-breaking

What happened

Robbins Geller Rudman & Dowd has announced a securities class action on behalf of Perrigo investors who bought shares between February 27, 2023 and November 4, 2025, alleging violations of the Securities Exchange Act of 1934 by the company and certain current and former executives. The proposed class period overlaps with Perrigo’s execution of its “One Perrigo” simplification strategy, Project Energize, Supply Chain Reinvention, and the launch ramp of Opill, so plaintiffs are likely to focus on alleged misstatements or omissions around these initiatives and the company’s financial outlook. At this stage, the case is in its early phase, with investors having until January 16, 2026 to seek lead-plaintiff status, and there has been no finding on liability, damages, or the merits of the claims. The suit comes on top of previously disclosed legal exposures, including the generic pricing antitrust MDL, and reinforces that litigation and unallocated expenses remain a key risk factor for the name. While Perrigo’s shares already trade at a discounted multiple that embeds some skepticism on execution and leverage, a new securities case can prolong sentiment overhang and increase the probability of incremental legal costs or settlement outflows over the medium term.

Implication

For investors, this filing elevates the probability of incremental legal expense and a potential settlement, although such cases are often insurable and spread over time, limiting immediate balance-sheet stress. The main near-term impact is likely on sentiment and governance perception: allegations that company disclosures were misleading can cap multiple expansion until there is more clarity on the scope of claims and management’s response. Given that litigation risk was already part of the bear case and Perrigo trades at ~7–8x earnings with a high single-digit FCF yield, the stock may have some cushion, but the timeline for a rerating could extend as investors demand a higher risk premium. Monitoring points now include the specific allegations as court filings become public, any linkage to the disclosure of Project Energize or Supply Chain Reinvention milestones, and whether insurers cover most of the prospective financial exposure. Position sizing should reflect that while the fundamental cost-savings and Opill-driven growth path is unchanged today, stacked legal matters (generic pricing MDL plus this case) incrementally raise downside tail risk and the chance of management distraction over the next several years.

Thesis delta

The core BUY thesis—undemanding valuation, visible cost-savings from Project Energize and Supply Chain Reinvention, and Opill as a differentiated growth vector—remains intact, but litigation risk is now higher and more two-dimensional (antitrust plus securities). This new class action tilts the risk/reward modestly less favorably by adding potential legal costs and extending the likely duration of sentiment overhang, even if ultimate financial impact proves manageable. In practical terms, the stance stays BUY for fundamentally oriented, patient capital, but with a stronger emphasis on monitoring legal disclosures and a slightly higher required return to compensate for increased governance and litigation uncertainty.