PAHC

AI Memo

Phibro Animal Health

As of 2026-05-31/Confidence medium

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Data freshness

AI Memo

As of 2026-05-31 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

—

Confidence

medium

Horizon

—

Key catalyst

Q3 beat and FY26 guidance raise improved the near-term setup • 2026-05-06

Expected move: +27%

Biggest risk

The bear case is that the Brazil antimicrobial regulatory change and the still-levered balance sheet can offset the growth story if product mix or demand weakens; low free cash flow also means investors will want proof that the higher guidance is durable [#8-K-2026-05-06].

Invalidation

Break below $24 or thesis failure.

What would change my mind?

The bull case strengthened after the May 6 print: animal-health sales grew 13%, total sales rose 10%, adjusted EBITDA rose 11%, and management raised FY26 guidance while saying visibility into the rest of the year improved [#8-K-2026-05-06].

Research note

Recommendation

—

Confidence

medium

As of

2026-05-31

Base target

$36

p=50%

Bull target

$48

p=30%

Bear target

$24

p=20%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Brazil antimicrobial regulatory change is the main near-term overhang
FY26 execution and cash conversion must confirm the higher outlook
The bull case strengthened after the May 6 print: animal-health sales grew 13%, total sales rose 10%, adjusted EBITDA rose 11%, and management raised FY26 guidance while saying visibility into the rest of the year improved [#8-K-2026-05-06].

BearKey bullets

Brazil antimicrobial regulation could disrupt a meaningful slice of the animal-health mix and needs follow-up on scope and duration [#8-K-2026-05-06].
Coverage is thin and the packet does not provide a clean post-print analyst revision set, so near-term conviction should stay moderate.
Gross leverage was 3.1x with $740.9M of debt and only $77.5M of cash and short-term investments, leaving limited room for disappointment [#8-K-2026-05-06].

WatchKey bullets

Q3 beat and FY26 guidance raise improved the near-term setup

Summary

High-level snapshot

Recommendation

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $36 (p=50%)

Bull/Bear spread: +69% / -15%

Vs latest close: Bull +69% · Base +27% · Bear -15%

Scenario probabilities

Bull Target: $48 (p=30%)Base Target: $36 (p=50%)Bear Target: $24 (p=20%)

Commentary

Primary-source evidence is constructive: the May 6 release beat on sales, adjusted EPS, and adjusted EBITDA, then raised FY26 guidance and improved liquidity through a larger revolver. The main reason to stay cautious is the newly disclosed Brazil antimicrobial regulatory issue, and the packet does not surface a clean post-print analyst revision chain or a verified market-reaction series, so this is a positive but still monitoring-style setup rather than a high-conviction rerate.

As of 2026-05-31 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Brazil antimicrobial regulatory change is the main near-term overhang
FY26 execution and cash conversion must confirm the higher outlook

Scenarios

Bull Target (Scenario probability)

$48 / p=30% prob

Base Target (Scenario probability)

$36 / p=50% prob

Bear Target (Scenario probability)

$24 / p=20% prob

Price $28 as of 2026-06-02

Nearest Scenario: Bear (∆ 15%)

Targets vs latest close: Bull +69% · Base +27% · Bear -15%

Sentiment & Exposure

News Sentiment (30d)

0.00

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-05-06
Q3 beat and FY26 guidance raise improved the near-term setup
The May 6 release showed third-quarter net sales of $383.5M (+10%), adjusted EBITDA of $60.8M (+11%), adjusted diluted EPS of $0.76 (+19%), and an FY26 guide increase to $1.46B-$1.50B of sales and $247M-$255M of adjusted EBITDA, which is the core positive re-rating input [#8-K-2026-05-06].
Prob 85.00% • Move 7.00% • Priced-in 70.00%

Short-term Catalysts

Next few weeks

Brazil antimicrobial regulatory change is the main near-term overhang
2026-05-06
Management also flagged a post-quarter Brazil regulatory framework change affecting certain antimicrobial products, creating a short-term mix and margin question until the revenue exposure and remediation path are clearer [#8-K-2026-05-06].
Prob 55% • Move -4% • Priced-in 35%

Long-term Catalysts

Months to a year

FY26 execution and cash conversion must confirm the higher outlook
2026-06-30
The expanded revolver capacity to $435M, $77.5M of cash and short-term investments, and 3.1x gross leverage make the balance sheet workable, but the long case still depends on converting the raised FY26 outlook into sustained cash generation by fiscal year-end [#8-K-2026-05-06].
Prob 65% • Move 8% • Priced-in 50%

Risks

Brazil antimicrobial regulation could disrupt a meaningful slice of the animal-health mix and needs follow-up on scope and duration [#8-K-2026-05-06].
Coverage is thin and the packet does not provide a clean post-print analyst revision set, so near-term conviction should stay moderate.
Gross leverage was 3.1x with $740.9M of debt and only $77.5M of cash and short-term investments, leaving limited room for disappointment [#8-K-2026-05-06].
Twelve-month free cash flow was only $12.8M, so the raised guidance still has to convert into cash rather than remain an EBITDA-only story [#8-K-2026-05-06].

Peers

Symbol	Summary
ZTS	Zoetis is the category leader in animal health and remains the cleanest quality benchmark; relative to ZTS, PAHC still reads more like a smaller execution story than a full-scale franchise.
ELAN	Elanco is the more direct scale peer for judging whether PAHC can keep converting growth into margin and cash flow; it is the better comparison for operating durability than broad pharma comps.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Analysis date: 2026-05-31

AI Stock Memo: PAHC - Phibro Animal Health - RankAlpha