Is Perrigo Co. Plc overvalued or undervalued?

As of 2 August 2024, Perrigo Co. Plc has moved from an attractive to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued, particularly given its negative P/E ratio due to losses, a Price to Book Value of 0.82, and an EV to EBITDA ratio of 9.71. The return on equity (ROE) stands at -0.63%, which further underscores the challenges the company faces in generating shareholder value.
In comparison to its peers, Organon & Co. is rated very attractive with a P/E ratio of 2.90 and an EV to EBITDA of 6.45, highlighting a stark contrast in valuation and performance. Additionally, Perrigo's low return on capital employed (ROCE) of 4.98% raises concerns about its operational efficiency relative to its peers. The company's stock has underperformed against the S&P 500 over various time frames, particularly over the past three and five years, where it has seen declines of 34.38% and 51.97%, respectively.