Company Overview - Elanco Animal Health Incorporated (ELAN) is a member of the Medical sector, which includes 947 individual stocks and holds a Zacks Sector Rank of 5 [2] - ELAN currently has a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimates and revisions [3] Performance Analysis - ELAN has gained approximately 79.2% year-to-date, significantly outperforming the Medical sector's average return of 7.4% [4] - The Zacks Consensus Estimate for ELAN's full-year earnings has increased by 5.3% over the past three months, reflecting improving analyst sentiment [4] Industry Comparison - ELAN belongs to the Medical - Outpatient and Home Healthcare industry, which consists of 15 stocks and is currently ranked 50 in the Zacks Industry Rank [6] - Stocks in the Medical - Outpatient and Home Healthcare industry have gained about 8.6% year-to-date, indicating that ELAN is performing better than its industry peers [6] Other Notable Stocks - Tactile Systems Technology (TCMD) is another Medical stock that has outperformed the sector, with a year-to-date increase of 66% and a Zacks Rank of 2 (Buy) [5] - The consensus estimate for TCMD's current year EPS has risen by 29% over the past three months [5]

Core Viewpoint - Elanco Animal Health Incorporated (ELAN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Stock Ratings - The Zacks rating system is based on changes in a company's earnings picture, tracking EPS estimates from sell-side analysts through a consensus measure known as the Zacks Consensus Estimate [2]. - The Zacks rating system is beneficial for individual investors as it focuses on objective earnings estimate revisions rather than subjective analyst ratings [3][10]. Impact of Earnings Estimates on Stock Prices - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [5][7]. - Rising earnings estimates for Elanco Animal Health suggest an improvement in the company's underlying business, which could lead to higher stock prices [6]. Performance of Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Elanco Animal Health to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate Revisions for Elanco - Elanco Animal Health is projected to earn $0.93 per share for the fiscal year ending December 2025, with no year-over-year change, while the Zacks Consensus Estimate has increased by 5.3% over the past three months [9].

Core Insights - Elanco held its 2025 Investor Day, discussing forward-looking statements and financial expectations [1] - The company emphasized that its remarks would focus on non-GAAP financial measures, excluding the Aqua business divested on July 9, 2024 [2] Financial Performance - The discussion included organic performance metrics, which do not account for the impact of the Aqua business [2]

Core Viewpoint - Elanco Animal Health is entering a new phase focused on sustainable growth, margin expansion, and a stronger balance sheet, as outlined during its first Investor Day in five years [1] Financial Outlook - Elanco projects mid-single-digit organic revenue growth, high-single-digit adjusted EBITDA growth, and low-double-digit adjusted EPS growth starting in 2026 [2] - The company anticipates free cash flow of at least $1 billion from 2026 to 2028, with net leverage expected to fall below 3x in 2027, targeting a long-term range of 2.0x to 2.5x [2] R&D Investments - Elanco plans to expand R&D operations in Indianapolis and increase its U.S.-based manufacturing footprint, including investments in its Kansas monoclonal antibody facility [3] - The company expects approximately $1.1 billion in revenue from its innovation portfolio in 2026, an increase from prior expectations for 2025 [4] - Elanco has expanded its focus to eight innovation areas and added two new internal development platforms in monoclonal antibodies and immunotherapy [4] - More than 10 major pipeline programs are in place, with approvals expected for five to six differentiated assets between 2026 and 2031 [5] Cost Initiatives - Elanco detailed its Ascend productivity initiative, expecting $25 million in savings in 2026 and $60 million in 2027, affecting 600 roles through reductions or shifts [6] - A related charge of approximately $175 million is anticipated, with the Ascend program expected to deliver $200 to $250 million in adjusted EBITDA savings by 2030, achieving about 30% of this in 2026 [6] Analyst Insights - Analysts noted initial details on over 15 projects in key areas, including five to six blockbusters, positioning Elanco for three waves of innovation over the next decade [9] - If Elanco successfully executes its pipeline, it is expected to deliver upside to its long-term financial targets [9] - Elanco shares were trading at 21 times the 2026 EPS estimate, with an Outperform rating maintained by analysts [10]

Core Viewpoint - Elanco Animal Health is entering a new phase focused on sustainable growth, margin expansion, and a stronger balance sheet, as outlined during its first Investor Day in five years [1] Financial Outlook - Elanco projects mid-single-digit organic revenue growth, high-single-digit adjusted EBITDA growth, and low-double-digit adjusted EPS growth starting in 2026 [2] - The company anticipates free cash flow of at least $1 billion from 2026 to 2028, with net leverage expected to fall below 3x in 2027, targeting a long-term range of 2.0x to 2.5x [2] R&D Investments - Elanco plans to expand R&D operations in Indianapolis and increase its U.S.-based manufacturing footprint, including investments in its Kansas monoclonal antibody facility [3] - The company is progressing towards final USDA approval for Befrena, a potential blockbuster dermatitis treatment for dogs, with a launch expected in the first half of 2026 [4] - Elanco forecasts approximately $1.1 billion in revenue from its innovation portfolio in 2026, an increase from prior expectations for 2025 [4] - The company has expanded its focus to eight innovation areas and added two new internal development platforms in monoclonal antibodies and immunotherapy [4] - More than 10 major pipeline programs are expected to carry blockbuster potential, with approvals anticipated for five to six differentiated assets between 2026 and 2031 [5] Cost Initiatives - Elanco detailed its Ascend productivity initiative, expecting $25 million in savings in 2026 and $60 million in 2027, affecting 600 roles through reductions or shifts [6] - A related charge of approximately $175 million is anticipated, with the Ascend program expected to deliver $200 to $250 million in adjusted EBITDA savings by 2030, with about 30% achieved in 2026 [6] - The initiative positions Elanco for durable, profitable growth with continued margin expansion and strong cash generation into the latter half of the decade [7] Analyst Insights - Analysts noted initial details on over 15 projects in key areas, including five to six blockbusters, positioning Elanco for three waves of innovation over the next decade [9] - If Elanco successfully executes its pipeline, it is expected to deliver upside to its long-term financial targets [9] - Elanco shares were trading at 21 times the 2026 EPS estimate, with an Outperform rating maintained by analysts [10]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if ad-blockers are enabled, suggesting the need to disable them for a better experience [1]

Elanco Investor Day Summary Company Overview - **Company**: Elanco Animal Health - **Event**: 2025 Investor Day - **Focus**: Sustainable growth, innovation, and financial outlook Key Industry Insights - **Animal Health Market**: - Current size: $42 billion, projected to grow to $60 billion in the next decade [13] - Pet market projected to reach $24 billion by 2030, driven by parasiticides [43] - Farm animal market expected to grow to $27 billion, with poultry as a major driver [44] Core Company Strategies - **Sustainable Growth**: - Commitment to mid-single-digit constant currency revenue growth [8] - Focus on innovation with a commitment of $1.1 billion for the next year, aiming to double by 2028 [9][30] - **Innovation Pipeline**: - Introduction of five to six potential blockbusters between 2026 and 2031 [10] - Emphasis on a diverse portfolio with a strong pipeline of new products [30] - **Financial Goals**: - Targeting high single-digit adjusted EBITDA constant currency revenue growth starting in 2026 [11] - Projecting $1 billion in cash flow creation over the next three years [12] Market Trends and Drivers - **Pet Market Trends**: - Increased willingness of pet owners to spend on pet care [17] - Growing decision-making power of pet owners, necessitating CRM data and accessibility [18] - Shift towards omnichannel approaches to reach consumers [19] - **Farm Animal Market Trends**: - Focus on ruminants and poultry due to their durability and growth potential [21] - Emphasis on disease prevention and food safety as key growth areas [22] Financial Performance and Projections - **Recent Performance**: - Nine consecutive quarters of growth, with a stable base business now flat [46] - **Future Projections**: - Anticipated growth from the "Big Six" products, with significant contributions expected by 2026 [47] - Continued expansion in both pet and farm animal segments, leveraging existing strengths [50] Leadership and Organizational Structure - **Executive Team**: - Experienced leadership with a focus on innovation and market growth [36] - Commitment to employee engagement and performance management linked to financial outcomes [40] Additional Insights - **Restructuring Initiatives**: - Recent restructuring aimed at increasing efficiency and capacity [32] - Strategic partnerships and collaborations to enhance product offerings and market reach [55] - **Regulatory Engagement**: - Ongoing constructive dialogue with USDA for product approvals and market entry [34] Conclusion - Elanco is positioned for sustainable growth through a robust innovation pipeline, strategic market engagement, and a commitment to financial discipline. The company aims to leverage its strengths in both the pet and farm animal markets to capture significant growth opportunities in the coming years.

Defining Elanco's New Era of Growth December 9, 2025 1 Introduction Tiffany Kanaga VP Investor Relations & ESG 2 Notices and Disclaimers Forward-Looking Statements. This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning product launches and revenue from such products, our 2025 full year and fourth quarter guidance, long-term expectations, our expectations regarding debt levels, and expectations regarding o ...

Core Insights - Elanco Animal Health is entering a new era of sustainable growth and long-term value creation, emphasizing its Innovation, Portfolio, and Productivity (IPP) strategy to achieve mid-single digit organic revenue growth and adjusted EBITDA margin expansion [1][2] Financial Outlook - Elanco has outlined a three-year financial outlook starting in 2026, projecting mid-single digit organic constant currency revenue growth, high-single digit adjusted EBITDA growth, and low double-digit adjusted EPS growth [4][5] - The company anticipates a net leverage ratio improvement to below 3x by 2027, with a long-term target of 2.0x to 2.5x [4][5] - Expected innovation revenue contribution is approximately $1.1 billion in 2026, with plans to double revenue from 'Big 6' blockbuster products by 2028 [4][13] Innovation Strategy - Elanco is developing over 10 major innovation products, with 5-6 blockbuster-potential approvals expected between 2026 and 2031 [4][11] - The company has two in-house technology platforms focused on monoclonal antibody discovery and immuno-therapeutics, enhancing its innovation pipeline [4][11][12] - The anticipated launch of Befrena™, an injectable monoclonal antibody for canine dermatitis, is expected in the first half of 2026 [7][10] Operational Efficiency - Elanco's Elanco Ascend program aims to generate $200 to $250 million in adjusted EBITDA savings by 2030, with approximately 30% of these savings expected in 2026 [17][18] - The company plans to restructure its operations, including the closure of its German animal R&D facility and a targeted reduction in its manufacturing workforce, impacting around 600 roles [16][18] Market Position - Elanco holds leading positions in U.S. Pet Health and global markets for poultry, beef, and swine, positioning itself for sustained growth [13] - The company is committed to investing in U.S. operations, including expanding its R&D presence and manufacturing capabilities [3][9]

Core Insights - The company anticipates natural gross margin expansion driven by a growing and accelerating basket of innovation, which has higher margins than the corporate average [1] - The proactive approach of the company includes cost-related initiatives and productivity measures, particularly through investments in automation and AI to enhance gross margins [1]