We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Continue to Hold PAHC Stock in Your Portfolio?
Read MoreHide Full Article
Key Takeaways
PAHC Animal Health sales rose 13% as MFA integration and vaccines drove broad-based growth.
PAHC MFA revenues rose 25%, while legacy MFA grew 5% on North American demand and acquisitions.
PAHC vaccine sales increased 16%, driven by international demand and higher swine and autogenous sales.
Phibro Animal Health Corporation (PAHC - Free Report) is benefitting from the strength of its Animal Health business, with the addition of Zoetis’ MFA (medicated feed additives) portfolio being a solid tailwind. The company is focusing on new developments, along with incremental registrations and growing volumes of existing vaccine technologies. At the same time, solid financial health enhances the stock’s appeal. However, macroeconomic challenges and foreign currency fluctuations can weigh on Phibro’s financial results.
Over the past year, this Zacks Rank #3 (Hold) stock has risen 27.6% against the industry’s 29.4% fall and the S&P 500 composite’s 26.2% growth.
The renowned animal health and mineral nutrition company has a market capitalization of $1.28 billion. PAHC has an earnings yield of 9.8% compared with the industry’s yield of 3.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 16.3%.
Let’s delve deeper.
What’s Favoring PAHC Stock?
Animal Health Business Growth Continues: Phibro’s animal health products, including MFAs, vaccines and nutritional specialty products, are designed to support animal nutrition and help manage disease outbreaks across major food animal species. Following the integration of Zoetis’ MFA business, Phibro gained more than 37 established product lines marketed across approximately 80 countries, along with six manufacturing sites in the United States, Italy and China.
Image Source: Zacks Investment Research
In the third quarter of fiscal 2026, Animal Health net sales increased 13% year over year, reflecting growth across MFAs, nutritional specialties and vaccines. The acquired MFA business generated a full quarter of revenues, up 25% versus last year, while legacy MFA sales increased 5% on demand in North America and certain antimicrobials sold by the ethanol performance business. Nutritional Specialty net sales were lifted by higher demand in North America and higher companion animal sales, while vaccine net sales were supported by increased demand in Israel and higher sales of autogenous vaccines.
Prospering Vaccine Business: Phibro markets approximately 50 product lines for the prevention of diseases in poultry, including vaccines to protect against Infectious Bursal Disease, Infectious Bronchitis, Newcastle Disease, Reovirus, Salmonella and Coryza. To support demand and broaden access across geographies, Phibro is investing to increase vaccine manufacturing capacity at several locations, including its vaccine production facility in Guarulhos, Brazil. In third-quarter fiscal 2026, net sales of vaccines increased 16% year over year, driven by higher international demand, including Israel, as well as higher domestic swine demand and higher sales of autogenous vaccines.
Stable Solvency Structure: At the end of third-quarter fiscal 2026, Phibro’s cash and short-term investments were $77.5 million. Total debt was $740.9 million, implying a 3.1 gross leverage ratio and a 2.8 net leverage ratio. Subsequent to the quarter-end, Phibro increased revolving credit commitments by $125 million to $435 million, strengthening liquidity. During the third quarter, the company paid a quarterly dividend of $0.12 per share, or $4.9 million in aggregate.
Concerns for Phibro
Mecadox Struggles With Regulatory Issues: Mecadox (carbadox), a key product for swine producers, remains under persistent regulatory scrutiny due to residue concerns. It has been banned in the E.U. since 1998 and in several other countries outside the United States. In November 2023, the FDA issued a final order to revoke the approved method for detecting residues of carbadox and also proposed withdrawing approval of all new animal drug applications providing for the use of carbadox in medicated swine feed, offering an opportunity for a hearing. In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court seeking to invalidate the order. If the company cannot defend the product’s safety or loses its legal challenge, it could negatively affect results and could accelerate customer shifts toward alternative products.
Foreign Exchange Exposure: Phibro conducts operations globally and is exposed to multiple currencies, with production in countries such as Brazil and Israel, where costs are largely in local currencies while selling prices are often set in U.S. dollars. Currency movements can pressure the cost of goods sold and reported profitability, and pricing actions may lag fast moves.
PAHC Stock Estimate Trend
The Zacks Consensus Estimate for Phibro’s fiscal 2026 earnings per share (EPS) projects 47% growth to $3.08. The estimate has moved up 0.7% in the past 30 days.
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $1.49 billion. This suggests a 14.8% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Align Technology (ALGN - Free Report) and Integra LifeSciences (IART - Free Report) .
Globus Medical has an earnings yield of 5.9% compared to the industry’s negative 3.5% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 26.3%. GMED shares have rallied 36.6% against the industry’s 5.6% fall over the past year.
Align Technology, sporting a Zacks Rank #1, has an estimated long-term earnings growth rate of 10.3% compared with the industry’s 9.6% growth. Shares of the company have dropped 4.2% against the industry’s 8.1% rise. ALGN’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%.
Integra LifeSciences, carrying a Zacks Rank #2 (Buy), has an earnings yield of 13.6% against the industry’s negative 3.5% yield. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 16.7%. IART shares have rallied 43.4% against the industry’s 5.7% decline over the past year.
View the Zacks #1 Rank List
Image: Bigstock
Should You Continue to Hold PAHC Stock in Your Portfolio?
Key Takeaways
Phibro Animal Health Corporation (PAHC - Free Report) is benefitting from the strength of its Animal Health business, with the addition of Zoetis’ MFA (medicated feed additives) portfolio being a solid tailwind. The company is focusing on new developments, along with incremental registrations and growing volumes of existing vaccine technologies. At the same time, solid financial health enhances the stock’s appeal. However, macroeconomic challenges and foreign currency fluctuations can weigh on Phibro’s financial results.
Over the past year, this Zacks Rank #3 (Hold) stock has risen 27.6% against the industry’s 29.4% fall and the S&P 500 composite’s 26.2% growth.
The renowned animal health and mineral nutrition company has a market capitalization of $1.28 billion. PAHC has an earnings yield of 9.8% compared with the industry’s yield of 3.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 16.3%.
Let’s delve deeper.
What’s Favoring PAHC Stock?
Animal Health Business Growth Continues: Phibro’s animal health products, including MFAs, vaccines and nutritional specialty products, are designed to support animal nutrition and help manage disease outbreaks across major food animal species. Following the integration of Zoetis’ MFA business, Phibro gained more than 37 established product lines marketed across approximately 80 countries, along with six manufacturing sites in the United States, Italy and China.
Image Source: Zacks Investment Research
In the third quarter of fiscal 2026, Animal Health net sales increased 13% year over year, reflecting growth across MFAs, nutritional specialties and vaccines. The acquired MFA business generated a full quarter of revenues, up 25% versus last year, while legacy MFA sales increased 5% on demand in North America and certain antimicrobials sold by the ethanol performance business. Nutritional Specialty net sales were lifted by higher demand in North America and higher companion animal sales, while vaccine net sales were supported by increased demand in Israel and higher sales of autogenous vaccines.
Prospering Vaccine Business: Phibro markets approximately 50 product lines for the prevention of diseases in poultry, including vaccines to protect against Infectious Bursal Disease, Infectious Bronchitis, Newcastle Disease, Reovirus, Salmonella and Coryza. To support demand and broaden access across geographies, Phibro is investing to increase vaccine manufacturing capacity at several locations, including its vaccine production facility in Guarulhos, Brazil. In third-quarter fiscal 2026, net sales of vaccines increased 16% year over year, driven by higher international demand, including Israel, as well as higher domestic swine demand and higher sales of autogenous vaccines.
Stable Solvency Structure: At the end of third-quarter fiscal 2026, Phibro’s cash and short-term investments were $77.5 million. Total debt was $740.9 million, implying a 3.1 gross leverage ratio and a 2.8 net leverage ratio. Subsequent to the quarter-end, Phibro increased revolving credit commitments by $125 million to $435 million, strengthening liquidity. During the third quarter, the company paid a quarterly dividend of $0.12 per share, or $4.9 million in aggregate.
Concerns for Phibro
Mecadox Struggles With Regulatory Issues: Mecadox (carbadox), a key product for swine producers, remains under persistent regulatory scrutiny due to residue concerns. It has been banned in the E.U. since 1998 and in several other countries outside the United States. In November 2023, the FDA issued a final order to revoke the approved method for detecting residues of carbadox and also proposed withdrawing approval of all new animal drug applications providing for the use of carbadox in medicated swine feed, offering an opportunity for a hearing. In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court seeking to invalidate the order. If the company cannot defend the product’s safety or loses its legal challenge, it could negatively affect results and could accelerate customer shifts toward alternative products.
Foreign Exchange Exposure: Phibro conducts operations globally and is exposed to multiple currencies, with production in countries such as Brazil and Israel, where costs are largely in local currencies while selling prices are often set in U.S. dollars. Currency movements can pressure the cost of goods sold and reported profitability, and pricing actions may lag fast moves.
PAHC Stock Estimate Trend
The Zacks Consensus Estimate for Phibro’s fiscal 2026 earnings per share (EPS) projects 47% growth to $3.08. The estimate has moved up 0.7% in the past 30 days.
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $1.49 billion. This suggests a 14.8% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Align Technology (ALGN - Free Report) and Integra LifeSciences (IART - Free Report) .
Globus Medical has an earnings yield of 5.9% compared to the industry’s negative 3.5% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 26.3%. GMED shares have rallied 36.6% against the industry’s 5.6% fall over the past year.
GMED sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology, sporting a Zacks Rank #1, has an estimated long-term earnings growth rate of 10.3% compared with the industry’s 9.6% growth. Shares of the company have dropped 4.2% against the industry’s 8.1% rise. ALGN’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%.
Integra LifeSciences, carrying a Zacks Rank #2 (Buy), has an earnings yield of 13.6% against the industry’s negative 3.5% yield. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 16.7%. IART shares have rallied 43.4% against the industry’s 5.7% decline over the past year.