Perrigo Earnings: Margin Strength and Infant Formula Recovery Drive Solid Q1 Performance

No-moat Perrigo reported first-quarter results that were broadly in line with our expectations. Net sales declined 3.5% year over year to $1.04 billion, largely due to a 3.2% headwind from divestitures, product exits, and currency translation. Despite softer revenue, adjusted EPS more than doubled to $0.60, driven by improved gross margin and disciplined cost management. This was well received by investors, with shares up nearly 7% following the results. After making minor adjustments to our model, we are maintaining our fair value estimate of $35 per share.