The Phibro Animal Health Corporation (NASDAQ:PAHC) First-Quarter Results Are Out And Analysts Have Published New Forecasts
There's been a notable change in appetite for Phibro Animal Health Corporation (NASDAQ:PAHC) shares in the week since its first-quarter report, with the stock down 15% to US$32.96. Phibro Animal Health reported in line with analyst predictions, delivering revenues of US$387m and statutory earnings per share of US$2.43, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Phibro Animal Health after the latest results.
Taking into account the latest results, the consensus forecast from Phibro Animal Health's three analysts is for revenues of US$1.58b in 2027. This reflects a reasonable 2.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 22% to US$3.09. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.58b and earnings per share (EPS) of US$2.92 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Phibro Animal Health
There's been no major changes to the consensus price target of US$47.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Phibro Animal Health at US$55.00 per share, while the most bearish prices it at US$37.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Phibro Animal Health shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Phibro Animal Health's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Phibro Animal Health's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Phibro Animal Health is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Phibro Animal Health's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Phibro Animal Health going out to 2029, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for Phibro Animal Health that you need to be mindful of.
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