Feb. 10 at 8:53 PM
$ELAN
Hitting a multi-year high today (monthly chart attached - some may be familiar with the chart pattern).
In addition, here are some key points from a KeyBanc analyst alert today that discusses ELAN and ZTS:
We are publishing our proprietary KeyBank Vet Clinic Credit Card data, which tracks spending across ~2M account
holders.
● For January 2026, Vet Clinic activity showed a modest increase in customer volumes, up ~1.4% y/y on an adjusted
basis (one fewer business day in 2026), while spend was up ~5.5%.
We view this data as slightly positive for the companion animal businesses of ELAN and ZTS. Additionally, we note
that alternative channels as measured by Chewy cardholder data continues to perform a little better on a relative
basis, with volumes up ~2.4% y/y and spend up ~5.4%.
Valuation & Risks:
Elanco Animal Health Incorporated (ELAN)
Shares of ELAN are trading at a ~24x forward P/E multiple, which is a premium to its two-year average of ~16x. However, we believe this is warranted due to ELAN’s higher expected revenue growth, expanding margins, and improved balance sheet. Our
$27 price target is predicated off shares trading at ~26.5x our FY26 adj. EPS estimate and ~23x our FY27 adj. EPS estimate one year from now.
Risks that could impede the stock from achieving our price target: The animal health industry is highly competitive. Many of ELAN’S competitors are conducting R&D activities in areas served by ELAN’s products and in areas in which it is developing products. ELAN’s R&D, acquisition, and licensing efforts may fail to generate commercially successful new products or to expand the use of its existing products. Disruptive innovation and advances in veterinary medical practices, animal health technologies, and alternatives to animal-derived protein could negatively affect the markets for ELAN’s products. Generic products may be viewed as more costeffective than ELAN’s products. Regulatory restrictions and bans on the use of antibiotics and productivity products in farm animals, as well as changing market demand, may continue to negatively affect demand for certain of ELAN’s farm animal products. An outbreak of infectious disease carried by farm animals could negatively affect the demand for, and sale and production of, ELAN’s farm animal products. The consolidation of ELAN’s customers and distributors could negatively affect the pricing of its products. Manufacturing problems and capacity imbalances, including at ELAN’s contract manufacturers, could cause product launch delays, inventory shortages, recalls, and/or unanticipated costs. ELAN’s business may be negatively affected by weather conditions and the availability of natural resources. The animal health industry and demand for many of ELAN’s products in a particular region are affected by weather conditions, including those related to climate change, varying weather patterns, and weather-related pressures.
