Animal Health's Nice Upside

Animal Health International, Inc. (AHII - Snapshot Report), based in Dallas/Fort Worth Texas, is a leading distributor of animal health products in the U.S., focused on both the production animal and companion animal health product segments of the market. AHII reported lower than expected 1Q09 net income of $0.3M, or EPS of $0.01.

Management cited constrained production animal customer sales, as a result of volatile commodity prices during the quarter, coupled with lower sales in the companion animal business associated with the general downturn in the economy as the main drivers. We have revised our price target to reflect a more conservative medium term outlook, however believe downside risk is limited at current levels and retain a Buy rating.

We have valued AHII on a forward price/earnings (P/E) basis, as well as a comparison to similar firms in the animal health products sector. Our $3.50 price target represents a 7.5x times FY09 EPS of $0.47.

Read the full analyst report on AHII