Stifel announced on Tuesday that it had raised its recommendation on Virbac shares from 'hold' to 'buy', with a price target reduced from 402 to 342 euros.
In a note dedicated to the animal health sector, the analyst considers that the current share price of the French pharmaceutical laboratory does not reflect the turnaround it has managed to achieve over the last five years.
Nor, in his opinion, does its stock market valuation take into account the improvement in business linked to the Covid-19 crisis, or the effect of the sale of the Sentinel brand, which has enabled the company to reduce its debt and invest in its capacities in order to relaunch its growth.
According to Stifel, the Group is in a position to aim for average annual sales growth of around 8.1% over the period 2021-2026, accompanied by a stabilization of its operating margin above 19% by 2030.
With the strategic reorientation of its product portfolio towards blockbusters, the development of its animal feed range and the acceleration of its vaccine activities, Stifel expects Virbac to generate average annual EPS growth of 9% by 2026.
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Virbac specializes in the research, production and marketing of veterinary medicines. The activity is organized around 2 product families:
- pet medications: pest control drugs, vaccines, antibiotics, anesthetics, anti-inflammatory drugs, mouth/dental care products, ophthalmologic and dermatological products intended for dogs, cats, horses, birds, rodents, etc. The group also offers foods and electronic identification chips;
- livestock medications: pest control drugs and antibiotics intended for cattle, sheep, pigs, poultry, etc.
Net sales are distributed geographically as follows: France (15.4%), Europe (26.2%), Latin America (17.1%), Asia (16.4%), North America (13.2%), Pacific (9.3%), Africa and Middle East (2.4%).
VIRBAC 
