Elanco (ELAN, Financial) has been upgraded by Leerink from a Market Perform rating to an Outperform rating. This change is accompanied by a new price target of $18 for the stock. The upgrade reflects a more optimistic view on Elanco's future performance potential in the market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Elanco Animal Health Inc (ELAN, Financial) is $15.35 with a high estimate of $18.00 and a low estimate of $10.00. The average target implies an upside of 5.79% from the current price of $14.51. More detailed estimate data can be found on the Elanco Animal Health Inc (ELAN) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Elanco Animal Health Inc's (ELAN, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Elanco Animal Health Inc (ELAN, Financial) in one year is $13.02, suggesting a downside of 10.27% from the current price of $14.51. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Elanco Animal Health Inc (ELAN) Summary page.
ELAN Key Business Developments
Release Date: May 07, 2025
- Revenue: $1.193 billion, a decrease of 1% on a reported basis; 4% organic constant currency growth.
- Adjusted EBITDA: $276 million, a decrease of $18 million year-over-year.
- Adjusted EPS: $0.37, a $0.03 improvement year-over-year.
- Net Leverage Ratio: 4.4 times adjusted EBITDA.
- Innovation Revenue: $198 million in Q1; full-year expectations raised to $660 million to $740 million.
- US Pet Health Revenue: Declined 3% due to challenging retail environment and soft vaccine demand.
- International Pet Health Revenue: Grew 5% in constant currency.
- US Farm Animal Business: Grew 17%, driven by demand for Experior.
- Gross Margin: Increased 10 basis points to 57.4%.
- Interest Expense: $40 million, down from $66 million last year.
- Cash Used from Operations: $4 million in the quarter.
- Full-Year Revenue Guidance: Raised for FX impact; organic constant currency growth expected at 4% to 6%.
- Full-Year Adjusted EBITDA Guidance: $830 to $870 million.
- Full-Year Adjusted EPS Guidance: $0.80 to $0.86.
- Q2 Revenue Guidance: $1.175 billion to $1.195 billion.
- Q2 Adjusted EBITDA Guidance: $200 million to $220 million.
- Q2 Adjusted EPS Guidance: $0.17 to $0.21.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Elanco Animal Health Inc (ELAN, Financial) exceeded first-quarter guidance for revenue, adjusted EBITDA, and adjusted EPS, marking the seventh consecutive quarter of underlying growth.
- The company reported 4% organic constant currency revenue growth, driven by both price and volume increases.
- Elanco raised its full-year expectations for new product revenue to $660 million to $740 million, with strong performance from recently launched products like Credelio Quattro.
- The company is deleveraging faster than planned, improving its net leverage target for year-end to 3.9 to 4.3 times, aided by strong working capital performance and favorable currency impacts.
- Elanco's innovation strategy is yielding results, with $198 million in first-quarter revenue from new products and a robust pipeline, including the anticipated IL-31 approval in late 2025.
Negative Points
- The US retail business faced challenges, with a 21% decline in the first two months of the year due to cooler weather impacting consumer spending.
- Elanco is exposed to potential tariff impacts, estimating a $16 million to $20 million negative impact on adjusted EBITDA for 2025, primarily due to US-China tariffs.
- The company is maintaining its full-year adjusted EBITDA and EPS guidance despite macroeconomic uncertainties and potential tariff risks.
- Operating expenses increased by 3% year-over-year, driven by investments in product launches and R&D, impacting short-term profitability.
- The international farm animal business faced headwinds from the Echstone recall and commercial model changes, creating a 4% point headwind to year-over-year growth.
