Phibro Animal Health Corporation

Phibro Animal Health closed out fiscal 2026 with full-year net sales topping $1.5 billion, adjusted EBITDA climbing 39% to $255 million, and adjusted diluted earnings per share jumping 48% to $3.22, marking the first complete fiscal year since folding in a large medicated feed additive portfolio. The acquired feed additive business grew 70% for the full year and added $354.3 million in sales, while the Animal Health segment overall rose 21% to $1.162 billion, Mineral Nutrition climbed 11% to $282.3 million, and vaccine sales rose 14% to $156.4 million. However, free cash flow came in at just $9.9 million due to an $86.3 million inventory buildup, leaving total debt at $737.9 million and gross leverage at 2.9 times EBITDA. Guidance for fiscal 2027 calls for net sales of $1.55 billion to $1.6 billion and adjusted EBITDA of $258 million to $268 million, a sharp step down from this year's pace, with regulatory uncertainty in Brazil and the Chicago Heights plant closure adding further headwinds. Hedge fund ownership fell from 24 funds to 17 funds, and short interest sits at 6.96% of float, suggesting the market is still pricing in the acquisition's full impact.

Phibro Animal Health Corporation reported record net sales of more than $1.5 billion for fiscal 2026, with adjusted EBITDA up 39% to $255 million, and issued fiscal 2027 guidance for net sales of $1.55 billion to $1.6 billion and adjusted EBITDA of $258 million to $268 million. In the fourth quarter, sales grew 5% and adjusted EBITDA grew 29%, driven by strong performance in Mineral Nutrition and the legacy Animal Health business. The company also announced the planned closure of its Chicago Heights manufacturing facility, which is expected to yield annual benefits of $15 million to $20 million starting in fiscal 2028. Guidance assumes minimal sales of virginiamycin in Brazil due to regulatory uncertainty, with a favorable outcome representing upside. CEO Dani Bendheim highlighted the successful integration of the acquired Zoetis MFA portfolio and the conclusion of the Phibro Forward transformation program.

Phibro Animal declared a quarterly dividend of $0.12 per share. The forward yield is 1.32%. The dividend is payable on September 23 to shareholders of record on September 2, with the ex-dividend date also on September 2.

Branded pharmaceutical stocks posted mixed first-quarter results, with aggregate revenues beating analyst consensus estimates by 3.6%. Merck reported revenues of $16.29 billion, up 4.9% year on year and exceeding expectations by 3%, while Eli Lilly delivered the strongest performance with revenues of $19.8 billion, a 55.5% increase that beat estimates by 13.7%. Zoetis was the weakest, with revenues of $2.26 billion rising just 2.9% and missing expectations by 2.1%. Phibro Animal Health reported revenues of $383.5 million, up 10.3% and beating estimates by 8%, and Bristol-Myers Squibb posted revenues of $11.49 billion, up 2.5% and topping expectations by 7.4%. Share prices across the group have been resilient, rising an average of 6.4% since the latest earnings results.