Phibro Animal Health: Balancing Strong EPS Growth with Cautious Hold Rating Amidst Flat Animal Health Performance

Morgan Stanley analyst Erin Wright maintained a Hold rating on Phibro Animal Health (PAHC – Research Report) yesterday and set a price target of $21.00.

Erin Wright’s rating is based on a combination of factors that reflect both positive and cautious elements in Phibro Animal Health’s recent performance and future outlook. The company reported a strong third-quarter earnings per share (EPS) of $0.63, surpassing consensus estimates, driven by robust growth in its Animal Health and Performance Products segments. This performance led to an upward revision of its fiscal year 2025 EPS guidance, indicating confidence in the company’s growth trajectory.
However, despite these positive developments, the decision to maintain a Hold rating suggests a balanced view, considering potential risks and uncertainties. While the integration of the ZTS MFA acquisition and mitigation strategies for tariffs are progressing well, the underlying Animal Health business showed flat growth, which could pose challenges. Additionally, the company’s revised revenue and EBITDA guidance, although positive, aligns closely with previous expectations, indicating limited immediate upside potential. Thus, the Hold rating reflects a cautious optimism, acknowledging both the strengths and the areas that require careful monitoring.