Phibro Animal Health’s PAHC diversified product portfolio and wide presence in key growth areas bolster our confidence in the stock. The stock carries a Zacks Rank #2 (Buy) currently.
Factors Driving PAHC's Growth
Phibro’s key animal health products, including Medicated Feed Additives (MFAs) and nutritional specialty products, enhance animal nutrition. The company’s leading product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry and swine. Similarly, the company’s nutritional product offerings, such as OmniGen-AF and Animate, are used increasingly in the global dairy industry. The company also manufactures vaccines, which protect animals from both viral and bacterial disease challenges. Moreover, the company is committed to developing its companion animal business and pipeline. These are key growth areas for Phibro both in the short and medium term, and it has been actively investing in these growth drivers to achieve its targets.
During the fiscal fourth quarter, Phibro entered into a purchase and sale agreement with Zoetis to acquire the latter’s MFA product portfolio, certain water-soluble products and related assets. The company anticipates to complete the transaction in the initial phase of fiscal 2025.
Phibro’s existing operations and established sales, marketing and distribution network in over 80 countries provide it ample scope to take advantage of global growth opportunities. Outside the United States, Phibro’s global footprint extends to key high-growth regions (countries where the livestock production growth rate is expected to be higher than the average growth rate), including Brazil and other countries in South America, China, India and Southeast Asia, Mexico, Turkey, Australia, Canada, Poland and other Eastern European countries and South Africa and other countries in Africa.
At the end of fiscal 2024, the company’s operations in countries outside of the United States contributed approximately 42.5% of its total revenues. Our model forecasts sales in Latin America and Canada to improve 10% in fiscal 2026. For fiscal 2025, a sales improvement of 10.8% and 14% is expected from Europe, Middle East & Africa, and Asia Pacific regions, respectively.
Phibro Animal Health Corporation Price
Phibro Animal Health Corporation price | Phibro Animal Health Corporation Quote
The stock has gained 63.4% in a year compared with the industry’s 18.4% rise. With the company strategically expanding through innovation and acquisitions, as well as expanding its business footprint, we expect the stock to continue its upward movement in the coming days.
Concerning Factor for PAHC
In a challenging macro environment, the Mineral Nutrition business has been facing adverse movements in commodity prices and inventory positions. For fiscal 2024, Mineral Nutrition growth was flat year over year. While margins may return to some historical levels as the fiscal year progresses, Phibro anticipates volume recovery might be longer. Meanwhile, sales of Performance Products during fiscal 2024 also decreased 10% year over year owing to the reduced demand for personal care product ingredients and industrial chemicals. Our model suggests a sales decline of 4.9% and 6% in Nutritional Specialty and Performance Products, respectively, for fiscal 2025.
Other Key Picks
Other top-ranked stocks in the broader medical space are Boston Scientific BSX, AxoGen AXGN and SiBone SIBN, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific’s shares have risen 52.2% in the past year. Estimates for the company’s earnings per share have remained constant at $2.40 for 2024 and at $2.71 for 2025 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.2%. In the last reported quarter, it posted an earnings surprise of 6.9%.
Estimates for AxoGen’s 2024 loss per share have narrowed to 1 cent from 19 cents in the past 30 days. Shares of the company have surged 126.3% in the past year compared with the industry’s growth of 13.9%. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%. In the last reported quarter, it delivered an earnings surprise of 200%.
Estimates for SiBone’s 2024 loss per share have remained constant at 89 cents in the past 30 days. Shares of the company have plunged 27.4% in the past year against the industry’s 13.9% growth. SIBN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.4%. In the last reported quarter, it delivered an earnings surprise of 15.4%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
