Barclays lifts Phibro Animal Health target to $22, keeps underweight rating

On Friday, Barclays (LON:BARC) increased its price target for Phibro Animal Health Corp (NASDAQ:PAHC) shares to $22 from the previous $20 while maintaining an Underweight rating on the stock. According to InvestingPro data, PAHC has delivered impressive returns, with the stock up 137% over the past year and currently trading near $23.67. The adjustment follows Phibro’s reported earnings for the second quarter of fiscal year 2025, where both revenue and adjusted earnings per share (EPS) exceeded consensus estimates by approximately 2% and 25%, respectively. The company maintains a "GOOD" overall financial health score according to InvestingPro’s comprehensive analysis, with particularly strong momentum metrics.

The company’s growth has been attributed to its Animal Health (AH) segment, which saw an 11% increase excluding the new Medicated Feed Additives (MFA) and a 33% surge including the MFA. The positive results have led to an upward revision of the fiscal year 2025 guidance, taking into account the newly incorporated MFA portfolio.

The revised guidance includes an increase in adjusted EPS by $0.53 at the midpoint. This boost in profitability is credited to the stronger than expected performance of the new MFA business, coupled with the robust results from Phibro’s legacy operations.

Barclays’ analyst highlighted the company’s financial achievements, noting the significant impact of the new MFA portfolio on the firm’s bottom line. Phibro’s financial outlook for the year has been positively adjusted, reflecting the company’s ability to integrate and capitalize on its recent business expansion.

In other recent news, Phibro Animal Health Corporation announced robust Q1 results for fiscal year 2025, with consolidated net sales reaching $260.4 million, a 13% increase year-over-year. The company saw significant growth across its segments, with a standout 22% increase in vaccine sales within its Animal Health business. Phibro has updated its fiscal year 2025 guidance, projecting increased net sales, EBITDA, and net income, and expects the newly acquired Zoetis (NYSE:ZTS) Medicated Feed Additive business to contribute meaningfully to revenue and margins.

In addition, Phibro announced a quarterly cash dividend of $0.12 per share for both its Class A and Class B common stock. The dividend underscores the company’s ongoing commitment to providing value to its stockholders and is a tangible return to the investors who have put their trust in the company’s stock.

The company also expanded its board with the appointment of Joyce J. Lee as a new independent Class II director. Lee’s extensive experience in the animal health industry is expected to contribute to the company’s strategic direction.

These are among the recent developments that reflect Phibro’s commitment to enhancing its governance and strategic oversight, while also maintaining its focus on its mission to support the health and productivity of animals.

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