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1. Company Snapshot

1.a. 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 protect pets from worms, fleas, and ticks under the Seresto, Advantage, Advantix, and Advocate brands; pet health therapeutics for pain, osteoarthritis, ear infections, cardiovascular, and dermatology indications in canines and felines under the Galliprant and Claro brands; vaccines, antibiotics, parasiticides, and other products for use in poultry and aquaculture production, as well as nutritional health products, including enzymes, probiotics, and prebiotics; and a range of vaccines, antibiotics, implants, parasiticides, and other products used in ruminant and swine production under the Rumensin and Baytril brands.The company sells its products to third-party distributors; veterinarians; and farm animal producers, including beef and dairy farmers, as well as pork, poultry, and aquaculture operations.


Elanco Animal Health Incorporated was founded in 1954 and is headquartered in Greenfield, Indiana.

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1.b. Last Insights on ELAN

Elanco Animal Health Incorporated's recent performance was positively driven by its Q3 2025 earnings beat, with quarterly earnings of $0.19 per share, surpassing the Zacks Consensus Estimate of $0.13 per share. The company's revenue grew 10% year-over-year to $1,137 million, with 9% organic constant currency growth. Elanco also raised its full-year outlook, expecting revenue growth of 6% to 6.5%. Additionally, the company's Credelio CAT received FDA Emergency Use Authorization for treating New World screwworm in cats. Institutional investors, such as First Horizon Advisors, increased their holdings in the company.

1.c. Company Highlights

2. Elanco Animal Health's Strong Q3 2025 Earnings Beat Expectations

Elanco Animal Health delivered a robust third-quarter performance, with 10% revenue growth on a reported basis and 9% organic constant currency growth, surpassing guidance for revenue, adjusted EBITDA, and adjusted EPS. The company's gross margin expanded 90 basis points to 53.1%, driven by the strong performance of its U.S. Farm Animal and U.S. Pet Health segments, which grew 20% and 9%, respectively. Adjusted EPS came in at $0.19, beating estimates of $0.13. The company's cash generated from operations was $219 million, and it ended the quarter with net debt of approximately $3.3 billion and a net leverage ratio of 3.7x.

Publication Date: Nov -15

📋 Highlights
  • Strong Q3 Performance:: 9% organic constant currency revenue growth, $198 million adjusted EBITDA, and $0.19 adjusted EPS (up $0.06 YoY).
  • Innovation Revenue Leader:: $655 million year-to-date innovation revenue, driven by Credelio Quattro ($100 million in 8 months) and Zenrelia (sales doubled QoQ).
  • Full-Year Guidance Raised:: Innovation revenue target increased by $100 million to $840–880 million, with 6–6.5% organic constant currency revenue growth expected.
  • Deleveraging Progress:: $562 million gross debt paydown achieved, net leverage ratio at 3.7x, exceeding 2025 targets and nearing 3x goal.
  • 2026 Strategic Outlook:: Anticipates $10–14 million EBITDA impact from tariffs, $15 million higher interest expense, but EBITDA margin expansion from cost savings under Elanco Ascend.

Innovation-Driven Growth

The company's innovation pipeline was a key driver of its success, with products like Credelio Quattro, Zenrelia, Experior, and Bovaer contributing to the growth. Credelio Quattro became Elanco's fastest pet health blockbuster in history, reaching $100 million in net sales in less than 8 months. Jeff Simmons highlighted that the company's innovation revenue reached $655 million year-to-date, with the full-year guidance raised by $100 million to $840 million to $880 million. This strong performance is expected to continue, with the company anticipating sustainable competitive revenue growth through its diverse portfolio of innovation.

Guidance and Outlook

Elanco raised its 2025 guidance, expecting organic constant currency revenue growth of 6% to 6.5%, with a revenue range of $4.645 billion to $4.67 billion, and adjusted EBITDA guidance by $20 million at the midpoint of the range. For 2026, the company expects net impact of $10 million to $14 million on adjusted EBITDA due to previously announced tariffs. The company is confident in its ability to deliver EBITDA margin expansion beginning in 2026, driven by general and administrative cost savings and manufacturing efficiencies under the Elanco Ascend program.

Valuation and Metrics

With a P/E Ratio of 291.04 and EV/EBITDA of 15.91, the market is pricing in significant growth expectations for Elanco Animal Health. The company's Net Debt / EBITDA ratio is 4.0, indicating a relatively high level of debt. However, the company's efforts to deleverage are on track, with gross debt paydown of $562 million, exceeding its 2025 debt paydown target. Analysts estimate next year's revenue growth at 5.1%, which may not be sufficient to justify the current valuation multiples.

3. NewsRoom

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Elanco Animal Health Incorporated (ELAN) Presents at Piper Sandler 37th Annual Healthcare Conference Transcript

Dec -04

Source: seekingalpha.com

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Elanco Animal Health Incorporated (ELAN) Presents at Evercore 8th Annual Healthcare Conference Transcript

Dec -03

Source: seekingalpha.com

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Elanco Animal Health Incorporated (NYSE:ELAN) Receives Average Rating of “Moderate Buy” from Analysts

Dec -01

Source: defenseworld.net

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Elanco executive appointed as Neurizon's Board Observer

Nov -26

Source: prnewswire.com

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Elanco executive appointed as Neurizon's Board Observer

Nov -26

Source: prnewswire.com

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Elanco's Credelio™ CAT (lotilaner) Receives First FDA Emergency Use Authorization (EUA) for Treatment of New World Screwworm (NWS) in Cats

Nov -21

Source: prnewswire.com

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Elanco Animal Health Stock Is Undervalued: Analyst

Nov -21

Source: benzinga.com

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Elanco to Participate in the Upcoming Investor Conferences

Nov -20

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.47%)

6. Segments

Pet Health

Expected Growth: 4.5%

Elanco's Pet Health segment growth of 4.5% is driven by increasing pet humanization, rising pet ownership, and growing demand for premium pet food and healthcare products. Additionally, the company's strategic acquisitions, expanded product portfolio, and strong veterinary relationships contribute to its growth momentum.

Farm Animal - Cattle

Expected Growth: 4.8%

Elanco Animal Health's cattle segment growth of 4.8% is driven by increasing demand for protein-rich food, rising adoption of precision livestock farming, and growing awareness of animal health and wellness. Additionally, Elanco's innovative products and services, such as its parasiticide and vaccine offerings, are contributing to the growth.

Farm Animal - Poultry

Expected Growth: 4.2%

Elanco's poultry segment growth of 4.2% is driven by increasing demand for protein-rich food, rising adoption of antibiotic-free products, and growing awareness of animal welfare. Additionally, Elanco's innovative vaccine portfolio and parasiticide products are addressing disease challenges in poultry, further fueling growth.

Farm Animal - Swine

Expected Growth: 4.0%

Elanco's Swine segment growth is driven by increasing global demand for protein, African Swine Fever (ASF) outbreaks, and rising adoption of antibiotic-free production. The 4.0% growth rate is also fueled by Elanco's innovative vaccine and parasiticide solutions, as well as its strategic partnerships with swine producers and veterinarians.

Farm Animal - Aqua

Expected Growth: 4.3%

Elanco's Aqua segment, focused on farm animal health, exhibits 4.3% growth driven by increasing global demand for protein-rich food, rising aquaculture production, and growing adoption of sustainable farming practices. Additionally, Elanco's innovative products and services, such as parasiticide treatments and nutritional solutions, address key health challenges in aquaculture, further fueling growth.

Contact Manufacturing

Expected Growth: 5.2%

Elanco Animal Health's Contact Manufacturing segment growth of 5.2% is driven by increasing demand for animal health products, expansion into emerging markets, and strategic partnerships. Additionally, investments in R&D and manufacturing capabilities have improved operational efficiency, enabling the company to capitalize on growing market trends.

7. Detailed Products

Rumensin

A feed additive used to improve feed efficiency and weight gain in cattle

Baytril

An antibiotic used to treat respiratory diseases in cattle and pigs

Clarisyn

A parasiticide used to control internal and external parasites in cattle

Improvac

A vaccine used to improve reproductive performance in pigs

Trifexis

A parasiticide used to prevent flea infestations and treat flea allergy dermatitis in dogs

Galliprant

A non-steroidal anti-inflammatory drug used to treat osteoarthritis in dogs

Intercept

A parasiticide used to prevent flea and tick infestations in dogs

8. Elanco Animal Health Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Elanco Animal Health Incorporated is moderate due to the presence of alternative products and services in the animal health industry.

Bargaining Power Of Customers

The bargaining power of customers for Elanco Animal Health Incorporated is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Elanco Animal Health Incorporated is moderate due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Elanco Animal Health Incorporated is high due to the growing demand for animal health products and services.

Intensity Of Rivalry

The intensity of rivalry for Elanco Animal Health Incorporated is high due to the presence of established competitors in the animal health industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.13%
Debt Cost 4.66%
Equity Weight 51.87%
Equity Cost 10.65%
WACC 7.77%
Leverage 92.78%

11. Quality Control: Elanco Animal Health Incorporated passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.0/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.9$

Current Price

21.9$

Potential

-0.00%

Expected Cash-Flows