Fact based stock research
Elanco Animal Health (NYSE:ELAN)

US28414H1032

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Elanco Animal Health stock research in summary

elanco.com

ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Elanco Animal Health (Pharmaceuticals, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Elanco Animal Health are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), are safely financed (Safety Rank of 52, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more

RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Elanco Animal Health's financial characteristics. As the company Elanco Animal Health's key financial metrics exhibit good value (Obermatt Value Rank of 59) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 52), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 59% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	59
Growth Rank	37
Safety Rank	52
Combined Rank	34

Country	USA
Industry	Pharmaceuticals
Index	Low Emissions, Employee Focus US
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Elanco Animal Health

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	20	51	48	59
GROWTH
GROWTH	93	75	45	37
SAFETY
SAFETY	12	82	65	52
SENTIMENT
SENTIMENT	n/a	16	37	^new
360° VIEW
360° VIEW	n/a	64	39	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Elanco Animal Health is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	20	51	48	59
GROWTH
GROWTH	93	75	45	37
SAFETY
SAFETY	12	82	65	52
COMBINED
COMBINED	33	89	51	34

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Elanco Animal Health the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Elanco Animal Health shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Elanco Animal Health. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value regarding Elanco Animal Health's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 55% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 72. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Elanco Animal Health (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Elanco Animal Health's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	51	52	58	56
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	2	45	38	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	67	74	68	72
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	20	51	48	59

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Elanco Animal Health; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Elanco Animal Health shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Elanco Animal Health. Capital Growth has a rank of 59, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 19, which means that, currently, professionals expect the company to grow less than 81% of its competitors, and Profit Growth is also low at a rank of 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Elanco Animal Health, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	98	17	23	19
PROFIT GROWTH
PROFIT GROWTH	n/a	90	34	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	75	69	59
STOCK RETURNS
STOCK RETURNS	80	55	71	65
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	93	75	45	37

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Elanco Animal Health.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Elanco Animal Health has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Elanco Animal Health is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Elanco Animal Health. Refinancing is at 63, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Liquidity is also good at 54, meaning the company generates more profit to service its debt than 54% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 31, which means the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Elanco Animal Health has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Elanco Animal Health could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Elanco Animal Health and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	4	40	38	31
REFINANCING
REFINANCING	65	100	71	63
LIQUIDITY
LIQUIDITY	19	45	61	54
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	12	82	65	52

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Elanco Animal Health and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	27	13	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	41	67	^new
MARKET PULSE
MARKET PULSE	n/a	42	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	16	37	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Elanco Animal Health.
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