Elanco Animal Health (ELAN)
NYSE:ELAN
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Elanco Animal Health
(NYSE:ELAN)
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Rating:60Neutral
Price Target:
$22.00
▼(-7.09% Downside)
Action:Reiterated
Date:05/09/26
ELAN’s score is driven primarily by improving fundamentals supported by solid and growing free cash flow and a constructive earnings update with raised 2026 guidance and a clearer deleveraging path. Offsetting these positives are still-weak GAAP profitability and a demanding valuation (high P/E), while technical indicators are broadly neutral and do not add meaningful support.
Positive Factors
Free cash flow generation
Sustained positive free cash flow despite GAAP losses is a durable strength. FCF supports debt reduction, funds launches and M&A, and provides flexibility for reinvestment without relying on equity raises. Continued FCF growth lowers refinancing risk and underpins deleveraging plans.
Negative Factors
GAAP profitability weakness
Persistent net losses and volatile earnings reduce confidence in sustainable profitability. Even with positive EBITDA, recurring GAAP losses limit shareholder returns, constrain strategic optionality, and mean the company must convert cash generation into consistent net income to fully de-risk the investment case.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Sustained positive free cash flow despite GAAP losses is a durable strength. FCF supports debt reduction, funds launches and M&A, and provides flexibility for reinvestment without relying on equity raises. Continued FCF growth lowers refinancing risk and underpins deleveraging plans.
Read all positive factors
Elanco Animal Health (ELAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.85B
Dividend YieldN/A
Average Volume (3M)6.12M
Price to Earnings (P/E)52.2
Beta (1Y)1.14
Revenue Growth10.53%
EPS Growth-164.58%
CountryUS
Employees9,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.50
Shares Outstanding499,449,600
10 Day Avg. Volume7,590,448
30 Day Avg. Volume6,118,682
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)1.72
Price to Sales (P/S)2.38
P/FCF Ratio39.55
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue2.95
Enterprise Value/Gross Profit5.96
Enterprise Value/Ebitda19.09
Forecast
1Y Price Target
$28.43Price Target Upside20.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)1.06
Revenue Forecast (FY)$5.06B
Elanco Animal Health Business Overview & Revenue Model
Company Description
Elanco Animal Health Incorporated, an animal health company, innovates, develops, manufactures, and markets products for pets and farm animals. It offers pet health disease prevention products, such as parasiticide and vaccine products that protec...
How the Company Makes Money
Elanco makes money primarily by selling animal health products, generating revenue when its products are purchased through veterinary clinics, distributors, retailers, and livestock/agricultural channels. Its revenue model is centered on two main ...
Elanco Animal Health Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call presented a materially positive picture: strong Q1 performance (10% organic growth, $1.371B revenue), major share gains and product momentum (Zenrelia, Credelio Quattro and Adtab), raised full-year guidance, meaningful EBITDA and EPS improvement, and a credible path to deleveraging supported by Elanco Ascend productivity plans and disciplined M&A. Near-term headwinds include a 40-basis-point gross margin decline in Q1, higher operating investments, regulatory work required for Zenrelia's U.S. label expansion, capacity scaling needs, and external timing effects (China/Middle East) and competitive risks that could temper near-term upside. Overall, the positives (outperformance, raised guidance, blockbuster product traction and clear balance-sheet focus) outweigh the manageable operational and timing risks discussed.Positive Updates
Strong Top-Line Growth
Reported revenue of $1.371 billion in Q1 2026, up 15% year-over-year; organic constant-currency revenue growth of 10% (driven by 2% price and 8% volume).
Negative Updates
Gross Margin Pressure in Q1
Adjusted gross margin was 57%, down 40 basis points year-over-year, impacted by inflation, inventory cost flow-through and product mix; management expects meaningful gross margin expansion only in the second half of the year as inventory headwinds pass.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth
Reported revenue of $1.371 billion in Q1 2026, up 15% year-over-year; organic constant-currency revenue growth of 10% (driven by 2% price and 8% volume).
Read all positive updates
Company Guidance
Elanco raised its 2026 outlook, now targeting full-year organic constant‑currency revenue growth of 5–7% (reported revenue $5.01–$5.085B, including an expected ~$60M FX tailwind), increased its innovation revenue target to $1.2B (Q1 innovation revenue was $287M), and raised adjusted EBITDA guidance to $975M–$1.005B (≈10% at the midpoint; a $20M raise driven by $34M Q1 outperformance offset by ~$9M incremental launch spend); adjusted EPS guidance is $1.03–$1.09 (up $0.03, ~13% growth at the midpoint). Q1 results included $1.371B revenue (10% organic constant‑currency growth), $334M adjusted EBITDA and $0.40 adjusted EPS. Q2 guidance is $1.30–$1.325B revenue (organic CC +4–6%), $240M–$260M adjusted EBITDA and $0.25–$0.28 adjusted EPS. On the balance sheet, Q1 net debt was $3.3B (net leverage 3.5x); management tightened year‑end net leverage guidance to 3.0–3.2x (from 3.1–3.3x) with a path to <3x in 2027 and a long‑term target of 2.0–2.5x, and reiterated a goal of delivering >$1B free cash flow through 2028.Elanco Animal Health Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
58
Neutral
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.89B | 4.71B | 4.44B | 4.42B | 4.41B | 4.76B |
| Gross Profit | 2.42B | 2.05B | 1.91B | 1.94B | 1.97B | 2.08B |
| EBITDA | 755.00M | 676.00M | 1.49B | -224.00M | 866.00M | 409.00M |
| Net Income | -242.00M | -232.00M | 338.00M | -1.23B | -78.00M | -483.00M |
Balance Sheet | ||||||
| Total Assets | 13.22B | 13.36B | 12.61B | 14.36B | 15.49B | 16.48B |
| Cash, Cash Equivalents and Short-Term Investments | 428.00M | 545.00M | 468.00M | 352.00M | 345.00M | 638.00M |
| Total Debt | 3.99B | 4.02B | 4.32B | 5.77B | 5.84B | 6.32B |
| Total Liabilities | 6.72B | 6.81B | 6.52B | 8.14B | 8.20B | 8.97B |
| Stockholders Equity | 6.50B | 6.55B | 6.10B | 6.22B | 7.29B | 7.51B |
Cash Flow | ||||||
| Free Cash Flow | 315.00M | 284.00M | 394.00M | 117.00M | 268.00M | 286.00M |
| Operating Cash Flow | 577.00M | 560.00M | 541.00M | 271.00M | 452.00M | 483.00M |
| Investing Cash Flow | -281.00M | -279.00M | 1.16B | -169.00M | -179.00M | -530.00M |
| Financing Cash Flow | -392.00M | -275.00M | -1.49B | -83.00M | -549.00M | 210.00M |
Elanco Animal Health Technical Analysis
Neutral
23.68
Price Trends
22.99
Negative
23.71
Negative
22.06
Negative
Market Momentum
-0.64
Positive
47.83
Neutral
51.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELAN, the sentiment is Neutral. The current price of 23.68 is above the 20-day moving average (MA) of 22.02, above the 50-day MA of 22.99, and above the 200-day MA of 22.06, indicating a bearish trend. The MACD of -0.64 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 51.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ELAN.
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)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $11.44B | 23.89 | 11.76% | 0.64% | -1.06% | -26.67% | |
64 Neutral | $34.09B | 20.76 | 62.41% | 1.69% | 2.40% | 8.35% | |
61 Neutral | $19.39B | 22.12 | -1.97% | 3.99% | 2.14% | 91.93% | |
61 Neutral | $40.59B | 23.59 | 20.79% | ― | 5.76% | ― | |
60 Neutral | $10.85B | 52.24 | -3.64% | ― | 10.53% | -164.58% | |
58 Neutral | $1.35B | 23.34 | 29.49% | 1.28% | 25.98% | 199.43% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
ELAN
Elanco Animal Health
22.82
9.64
73.14%
RDY
Dr Reddy's Laboratories
13.75
-0.93
-6.31%
VTRS
Viatris
16.26
7.99
96.54%
TEVA
Teva Pharmaceutical
34.61
16.90
95.43%
ZTS
Zoetis
80.23
-83.49
-50.99%
PAHC
Phibro Animal Health
33.68
9.54
39.53%
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.