Perrigo Company plc enters the week of August earnings with short sellers entrenched, the stock still falling, and the borrow market sending a quieter signal than last week's surge might have implied.
The short position has largely consolidated after last week's dramatic build. Short interest is essentially flat on the week — shares short edged up less than 0.1% to 13.6% of the free float, roughly 18.7 million shares. That's a sharp contrast to the 26% weekly surge flagged in the previous note. Bears have stopped adding aggressively but haven't retreated. The ORTEX short score has held in a tight band around 65–66 all week, confirming a stable rather than accelerating short thesis. What's changed is the stock itself: down 7.3% this week and 8.6% over the past month, to $10.22 — meaning shorts are being rewarded without needing to reload.
The borrow market underlines that this is a patient short rather than a crowded one. Availability runs at 222% of short interest — well supplied, in a range that's been tightening from above 360% in late June but is still comfortably above the threshold that signals stress. Cost to borrow is just 0.61%, barely above its 30-day average and nowhere near the levels that would indicate a squeeze. The options market adds a mild defensive tilt: the put/call ratio has drifted up to 0.40, roughly 1.6 standard deviations above its 20-day mean of 0.35, suggesting some increased demand for downside protection — but the ratio remains low in absolute terms and is well below its 52-week high of 0.97. The overall positioning picture reads as cautious and entrenched rather than urgent or stretched.
The Street's view has been consistently downbeat, though most cited actions are now several months old. JP Morgan downgraded PRGO to Neutral from Overweight back in November 2025 with a $20 target, and has since trimmed further to $18. Canaccord has maintained a Buy but repeatedly cut its target, most recently to $17 in late February 2026. With the stock now at $10.22, the consensus mean target of $16.50 implies substantial upside — but targets this far above the current price, from actions last updated in early May, carry limited near-term weight. The valuation is genuinely compressed: the stock trades at roughly 4.4x trailing earnings and 0.47x book, with EV/EBITDA near 7.2x. The Piotroski F-score has slipped from 6 to 5 over the past six months, ROA has declined, and FCF margin has fallen sharply — the cheap multiple reflects real fundamental deterioration, not a simple re-rating opportunity. Institutional holders are broadly passive at the top of the register, with BlackRock adding 3.7 million shares as of June 30, and Neuberger Berman also adding meaningfully — though both moves likely reflect index-rebalancing rather than active conviction.
Post-earnings price behaviour has been weak. The May 2026 print triggered a 4.5% one-day drop, followed by an 11.6% five-day decline. The prior report saw a muted open but still ended the five-day window down 6.3%. Perrigo's next earnings release is scheduled for August 5 — a date that now sits within striking distance and gives short sellers a defined catalyst to lean against.
The next four weeks narrow to a single event: whether the August 5 print gives the short thesis fresh momentum or finally delivers the operational progress bulls have been waiting on.
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