Phibro Animal Health Corporation PAHC recently completed the acquisition of Zoetis Inc.’s ZTS medicated feed additive (MFA) product portfolio and certain water-soluble products. The latest acquisition comes with a lineup of products across cattle, swine and poultry, which will complement and expand Phibro’s species and product portfolios. This will help the company’s customers meet the highest standards of animal care, prevent diseases and enhance nutrition around the world.
PAHC’s Likely Stock Trend Following the News
Subsequent to the news, the share price of PAHC remained unchanged at $23.12 at yesterday’s aftermarket trading.
The acquired product portfolio is expected to boost Phibro’s profitability and EBITDA margin and be accretive to its adjusted earnings per share. From investors’ viewpoint, the latest acquisition should expand and diversify Phibro’s revenue base, ultimately generating funds to support future investments in additional fast-growing animal health product categories. We expect the market sentiment to improve around the announcement.
Phibro currently has a market capitalization of $937.2 million. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 4.10%.
More on Phibro’s Acquisition
The purchase price of the acquisition was $350 million, subject to customary closing adjustments. The acquisition included a product portfolio with more than 37 product lines sold across approximately 80 countries, six manufacturing sites in the United States, Italy and China, and a team of more than 300 employees who primarily support the business's manufacturing and distribution activities. The acquired product portfolio generated approximately $400 million in revenues in 2023.
The latest acquisition broadens Phibro's solution options and expertise in supporting animal health globally. Meanwhile, it will help ensure that food is produced safely and sustainably for Phibro's consumers.
Industry Prospects Favor PAHC
Per a report from Market Research Future, the MFA market was valued at $14.90 billion in 2023 and is projected to grow $21.74 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.28% during the period. Factors such as reduced government office workers, delayed trade consignments, and farmers having less access to various items that were medicated feed additives will act as market drivers.
Image Source: Zacks Investment Research
Per a Techsci Research report, the global water soluble mineral and vitamin in feed market was valued at $4.38 billion in 2023 and is expected to witness a CAGR of 7.14% during 2023-2029. Key market growth drivers include increasing demand for animal products, technological advancements and an increasing focus on animal welfare.
Henceforth, Phibro’s latest acquisition turns out to be in favor of market prospects.
PAHC’s Price Performance
In the past year, PAHC’s shares have risen 106.6% compared with the industry’s 31.2% growth.
Phibro’s Zacks Rank and Other Key Picks
PAHC currently carries a Zacks Rank #1 (Strong Buy).
A few other top-ranked stocks in the broader medical space are Boston Scientific BSX, Globus Medical GMED and ResMed RMD, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boston Scientific’s shares have surged 69.3% in the past year. Estimates for the company’s earnings per share (EPS) have jumped 2.5% to $2.46 for 2024 and 2.2% to $2.77 for 2025 in the past 30 days. BSX’s earnings outpaced estimates in each of the trailing four quarters, delivering an average beat of 8.3%. In the last reported quarter, it posted an earnings surprise of 8.6%.
Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.
Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpBoston Scientific Corporation (BSX) : Free Stock Analysis Report
ResMed Inc. (RMD) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
Globus Medical, Inc. (GMED) : Free Stock Analysis Report
Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
