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Elanco Animal Health
(NYSE:ELAN)
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Rating:61Neutral
Price Target:
$23.50
▼(-7.52% Downside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by improving fundamentals and cash generation, supported by a positive earnings update with raised guidance and improving leverage. Technicals are moderately supportive with the stock trending above key moving averages. Offsetting these positives, valuation is constrained by ongoing losses (negative P/E) and the lack of a dividend signal.
Positive Factors
Sustained Organic Revenue Growth
Consistent organic growth and raised full‑year guidance reflect durable end‑market demand across pet and farm segments. Higher volumes and modest pricing indicate franchise strength that supports reinvestment, margin expansion, and a clearer path to converting top‑line gains into sustained earnings over the next several quarters.
Negative Factors
Bottom‑line Profitability Still Negative
Despite revenue and gross margin improvements, persistent negative net margins and negative ROE indicate the company has not yet converted operating gains into sustainable bottom‑line profitability. This limits capacity to deliver returns to shareholders and increases reliance on continued margin improvement and cash flow to derisk the business.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Organic Revenue Growth
Consistent organic growth and raised full‑year guidance reflect durable end‑market demand across pet and farm segments. Higher volumes and modest pricing indicate franchise strength that supports reinvestment, margin expansion, and a clearer path to converting top‑line gains into sustained earnings over the next several quarters.
Read all positive factors
Elanco Animal Health (ELAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.05B
Dividend YieldN/A
Average Volume (3M)4.49M
Price to Earnings (P/E)―
Beta (1Y)0.96
Revenue Growth11.95%
EPS Growth-145.71%
CountryUS
Employees9,650
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.41
Shares Outstanding499,621,830
10 Day Avg. Volume4,451,939
30 Day Avg. Volume4,494,459
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)1.72
Price to Sales (P/S)2.38
P/FCF Ratio39.55
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$31.20Price Target Upside22.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)1.11
Revenue Forecast (FY)$5.12B
Elanco Animal Health Business Overview & Revenue Model
Company Description
Elanco Animal Health, a firm dedicated to animal well-being, creates, produces, and commercializes a diverse array of solutions for both companion animals and livestock. For household pets, the company provides preventative health solutions, inclu...
How the Company Makes Money
Elanco makes money primarily by selling animal health products—pharmaceuticals, vaccines, and parasiticides—into two major end markets: (1) companion animals (e.g., dogs and cats) and (2) food animals/livestock (e.g., cattle, swine, poultry). Reve...
Elanco Animal Health Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call was predominantly positive: strong top-line performance (8% organic growth, $1.368B revenue), robust innovation momentum (Zenrelia, Credelio Quattro, AdTab), margin expansion (adjusted gross margin +80 bps, adjusted EBITDA +21%, adjusted EPS +31%), raised full-year guidance, and improving leverage (target ~3.0x year-end). Near-term headwinds include inventory cost pressures, elevated inflation, continued operating expense investments (DTC/R&D) and some regional/timing softness in International Farm Animal. Supply constraints for Befrena and moderating comparisons for some Farm Animal products are acknowledged but framed as manageable. Overall, highlights materially outweigh the limited lowlights.Positive Updates
Reported and Organic Revenue Growth
Second quarter revenue of $1.368 billion, up 10% reported and 8% organic on a constant currency basis (driven by +6% volume and +2% price). Full-year revenue guidance raised to $5.09B–$5.14B with organic constant currency growth guidance increased to 6%–7% (from 5%–7%).
Negative Updates
International Farm Animal Softness and Timing Impact
International Farm Animal grew only 2% organic constant currency in Q2, with management citing timing of certain shipments (primarily to the Middle East) as a headwind versus stronger year-to-date growth (7%).
Read all updates
Q2-2026 Updates
Positive
Negative
Reported and Organic Revenue Growth
Second quarter revenue of $1.368 billion, up 10% reported and 8% organic on a constant currency basis (driven by +6% volume and +2% price). Full-year revenue guidance raised to $5.09B–$5.14B with organic constant currency growth guidance increased to 6%–7% (from 5%–7%).
Read all positive updates
Company Guidance
Elanco raised its full‑year outlook, now targeting 6–7% organic constant‑currency revenue growth with total revenue of $5.09–$5.14 billion (including a ~$60M FX tailwind and ~1 ppt reported growth from the AHV acquisition); adjusted EBITDA of $1.01–$1.035 billion (≈13% growth at the midpoint) and adjusted EPS of $1.10–$1.16 (≈20% growth at the midpoint). Management also increased 2026 innovation revenue to about $1.25 billion, expects ~50 bps of full‑year gross‑margin expansion (and ~75 bps improvement in adjusted EBITDA margin year‑over‑year), aims for year‑end net leverage of ~3x (Q2 was 3.1x), and reiterated Elanco Ascend’s $200–$250 million adjusted‑EBITDA savings goal by 2030. For Q3 the company guided revenue of $1.195–$1.22 billion (organic cc growth 5–7%), adjusted EBITDA around $215 million and adjusted EPS $0.19–$0.22, noting ~11% YoY OpEx growth to support launch and DTC investments.Elanco Animal Health Financial Statement Overview
Summary
Income Statement
48
Neutral
Balance Sheet
57
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.02B | 4.71B | 4.44B | 4.42B | 4.41B | 4.76B |
| Gross Profit | 2.64B | 2.05B | 1.91B | 1.94B | 1.97B | 2.08B |
| EBITDA | 774.00M | 676.00M | 1.49B | -224.00M | 866.00M | 409.00M |
| Net Income | -199.00M | -232.00M | 338.00M | -1.23B | -78.00M | -483.00M |
Balance Sheet | ||||||
| Total Assets | 13.56B | 13.36B | 12.61B | 14.36B | 15.49B | 16.48B |
| Cash, Cash Equivalents and Short-Term Investments | 530.00M | 545.00M | 468.00M | 352.00M | 345.00M | 638.00M |
| Total Debt | 3.92B | 4.02B | 4.32B | 5.77B | 5.84B | 6.32B |
| Total Liabilities | 6.97B | 6.81B | 6.52B | 8.14B | 8.20B | 8.97B |
| Stockholders Equity | 6.59B | 6.55B | 6.10B | 6.22B | 7.29B | 7.51B |
Cash Flow | ||||||
| Free Cash Flow | 379.00M | 284.00M | 394.00M | 117.00M | 268.00M | 286.00M |
| Operating Cash Flow | 617.00M | 560.00M | 541.00M | 271.00M | 452.00M | 483.00M |
| Investing Cash Flow | -335.00M | -279.00M | 1.16B | -169.00M | -179.00M | -530.00M |
| Financing Cash Flow | -310.00M | -275.00M | -1.49B | -83.00M | -549.00M | 210.00M |
Elanco Animal Health Risk Analysis
Elanco Animal Health disclosed 46 risk factors in its most recent earnings report. Elanco Animal Health reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Elanco Animal Health Peers Comparison
UnderperformOutperform
Sector (51)
ELAN
Elanco Animal Health
22.12
5.02
29.36%
PAHC
Phibro Animal Health
34.29
6.09
21.62%
Elanco Animal Health Corporate Events
Executive/Board ChangesShareholder Meetings
Elanco Shareholders Back Board, Auditor and Executive Pay
Positive
May 27, 2026
At Elanco Animal Health’s annual shareholder meeting held on May 21, 2026, investors elected all board-nominated directors to one-year terms ending at the 2027 meeting, with each Class I and Class II nominee receiving solid majority support ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.