Phibro Animal Health Upgraded to Overweight by JPMorgan

JPMorgan analyst Ekaterina Knyazkova upgraded Phibro Animal Health to Overweight from Neutral, with a price target of $35, citing strong results and exceeding expectations in the integration of the Zoetis medicated feed additive business. The analyst believes solid animal health portfolio trends will continue, supported by healthy industry fundamentals and customer demand. JPMorgan sees a favorable setup for the company moving forward.

JPMorgan analyst Ekaterina Knyazkova has upgraded Phibro Animal Health (PAHC) to "Overweight" from "Neutral," with a new price target of $35, up from $25 [1]. The analyst cited strong performance and the successful integration of Zoetis' medicated feed additive business as key factors behind the upgrade. Knyazkova expects solid animal health portfolio trends to continue, driven by robust customer demand and healthy industry fundamentals [1].

Phibro Animal Health reported a fiscal third-quarter operating profit of $33.4 million, up 67.8% year-over-year, and an operating margin expansion of 204 bps [2]. The company's Animal Health business saw 42% sales growth, led by a 68% increase in Medicated Feed Additives (MFA) and other product sales [2]. The acquisition of Zoetis' MFA product portfolio and certain water-soluble products has added over 37 product lines sold across 80 countries, contributing to the company's growth [2].

Despite the positive outlook, Phibro Animal Health faces macroeconomic challenges, including the conflict between Russia and Ukraine, supply-chain disruptions, and heightened cybersecurity threats [2]. The strengthening of the U.S. dollar is also affecting the company's export market [2]. However, the company's strong fundamentals and growth opportunities make it an attractive investment for investors.

Phibro Animal Health's fiscal 2025 and 2026 earnings per share (EPS) are expected to increase 71.4% and 12.5% year-over-year, respectively, while revenues are projected to grow 25.7% and 10.3% for the same periods [2]. The company's estimated GF Value for one year is $22.96, suggesting a downside of 18% from the current price of $28 [3].

The upgrade from JPMorgan comes as analysts have been increasingly optimistic about Phibro Animal Health. The company's shares have climbed 52.8% in a year, outpacing the industry's 14.3% growth and the S&P 500's 11.7% gain [2]. Other top MedTech stocks, such as Align Technology (ALGN) and Hims & Hers Health (HIMS), have also seen strong performance, with ALGN and HIMS both receiving "Strong Buy" ratings from Zacks Investment Research [2].

References:
[1] https://www.tipranks.com/news/the-fly/phibro-animal-health-upgraded-to-overweight-from-neutral-at-jpmorgan-thefly
[2] https://finance.yahoo.com/news/phibro-animal-health-stock-52-121200579.html
[3] https://www.gurufocus.com/news/2961101/phibro-animal-health-pahc-receives-upgrade-and-price-target-boost-from-jp-morgan-pahc-stock-news