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Here's Why You Should Retain Phibro (PAHC) Stock For Now
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Phibro Animal Health Corporation (PAHC - Free Report) has been gaining from the robust performance of its Animal Health and Mineral Health segments. The company’s raised revenue and earnings per share (EPS) guidance for fiscal 2022 on improving business trends buoys optimism. Yet, tough competition and foreign exchange headwinds raise apprehension.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 19.3% compared with the 18.9% fall of the industry and 6.9% rise of the S&P 500.
The global diversified animal health and mineral nutrition company has a market capitalization of $793.06 million. The company‘s earnings for the fiscal second quarter surpassed the Zacks Consensus Estimate by 12.1%.
Phibro’s expected earnings growth for the next year is at 4.4%, compared with the industry’s growth expectation of 19.2%.
Let’s delve deeper.
Factors At Play
Diversified Product Portfolio: We are upbeat about Phibro’s key animal health offerings, including medicated feed additives and nutritional specialty products, which help improve animal nutrition. Phibro’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, are used increasingly in the global dairy industry. The company also manufactures vaccines that protect animals from viral and bacterial disease challenges. Meanwhile, Phibro’s mineral nutrition products strengthen an animal’s diet and help maintain its optimal health.
Bullish Guidance: The company projects net sales for fiscal 2022 in the range of $890.0-$920.0 million, an improvement from the earlier-provided band of $860.0-$890.0 million. Adjusted EPS was reiterated in the band of $1.30-$1.39, up from the earlier-issued band of $1.25-$1.32.
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Prospering Vaccine Business: Phibro is focusing on new developments along with incremental registrations and growing volumes of existing nutritional specialties and vaccine technologies. Phibro’s buyout of the assets of Israel-based developer and manufacturer of vaccines, KoVax, has widened its portfolio of aquaculture products.
In the second quarter of fiscal 2022, Phibro registered a 19.7% improvement in vaccine net sales, driven primarily by increased domestic and international volumes. In this regard, Phirbo recently introduced a new vaccine facility in Sligo, Ireland. The company’s vaccine business is witnessing higher domestic volumes as well as increased demand in the Asia-Pacific region.
Downsides
Competitive Landscape: Phibro faces threats from a substantial number of global and regional competitors with respect to its major products. The company’s competitive position is based principally on its product registrations, customer service and support, breadth of product line, product quality, manufacturing technology, facility location, and product prices.
Forex Woes: Phibro is subject to currency risk to the extent that its costs are denominated in currencies other than those in which the company earns revenues. In its fiscal second-quarter earnings call, the company noted that despite witnessing a foreign currency gain, volatility in foreign currency exchange rates continues to impact its performance.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Phibro’s fiscal 2022 earnings has moved 7.8% north to $1.38.
The Zacks Consensus Estimate for its fiscal 2022 revenues is pegged at $913.7 million, suggesting a 9.6% rise from the fiscal 2021 reported number.
Key Picks
A few stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , McKesson Corporation (MCK - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 37.3% against the industry’s 58.1% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 11.9%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 20.6%.
McKesson has gained 70.1% compared with the industry’s 5.2% growth over the past year.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently has a Zacks Rank #2.
Henry Schein has gained 29.7% compared with the industry’s 5.2% growth over the past year.
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Here's Why You Should Retain Phibro (PAHC) Stock For Now
Phibro Animal Health Corporation (PAHC - Free Report) has been gaining from the robust performance of its Animal Health and Mineral Health segments. The company’s raised revenue and earnings per share (EPS) guidance for fiscal 2022 on improving business trends buoys optimism. Yet, tough competition and foreign exchange headwinds raise apprehension.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 19.3% compared with the 18.9% fall of the industry and 6.9% rise of the S&P 500.
The global diversified animal health and mineral nutrition company has a market capitalization of $793.06 million. The company‘s earnings for the fiscal second quarter surpassed the Zacks Consensus Estimate by 12.1%.
Phibro’s expected earnings growth for the next year is at 4.4%, compared with the industry’s growth expectation of 19.2%.
Let’s delve deeper.
Factors At Play
Diversified Product Portfolio: We are upbeat about Phibro’s key animal health offerings, including medicated feed additives and nutritional specialty products, which help improve animal nutrition. Phibro’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, are used increasingly in the global dairy industry. The company also manufactures vaccines that protect animals from viral and bacterial disease challenges. Meanwhile, Phibro’s mineral nutrition products strengthen an animal’s diet and help maintain its optimal health.
Bullish Guidance: The company projects net sales for fiscal 2022 in the range of $890.0-$920.0 million, an improvement from the earlier-provided band of $860.0-$890.0 million. Adjusted EPS was reiterated in the band of $1.30-$1.39, up from the earlier-issued band of $1.25-$1.32.
Prospering Vaccine Business: Phibro is focusing on new developments along with incremental registrations and growing volumes of existing nutritional specialties and vaccine technologies. Phibro’s buyout of the assets of Israel-based developer and manufacturer of vaccines, KoVax, has widened its portfolio of aquaculture products.
In the second quarter of fiscal 2022, Phibro registered a 19.7% improvement in vaccine net sales, driven primarily by increased domestic and international volumes. In this regard, Phirbo recently introduced a new vaccine facility in Sligo, Ireland. The company’s vaccine business is witnessing higher domestic volumes as well as increased demand in the Asia-Pacific region.
Downsides
Competitive Landscape: Phibro faces threats from a substantial number of global and regional competitors with respect to its major products. The company’s competitive position is based principally on its product registrations, customer service and support, breadth of product line, product quality, manufacturing technology, facility location, and product prices.
Forex Woes: Phibro is subject to currency risk to the extent that its costs are denominated in currencies other than those in which the company earns revenues. In its fiscal second-quarter earnings call, the company noted that despite witnessing a foreign currency gain, volatility in foreign currency exchange rates continues to impact its performance.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Phibro’s fiscal 2022 earnings has moved 7.8% north to $1.38.
The Zacks Consensus Estimate for its fiscal 2022 revenues is pegged at $913.7 million, suggesting a 9.6% rise from the fiscal 2021 reported number.
Key Picks
A few stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , McKesson Corporation (MCK - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 37.3% against the industry’s 58.1% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 11.9%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 20.6%.
McKesson has gained 70.1% compared with the industry’s 5.2% growth over the past year.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently has a Zacks Rank #2.
Henry Schein has gained 29.7% compared with the industry’s 5.2% growth over the past year.