Elanco Animal Health Stock Is Undervalued: Analyst

Vandana Singh

November 21, 2025

As the pet care industry experiences rapid growth, pharmaceutical companies are increasingly focusing on developing innovative treatments for companion animals.

ELAN is charging ahead with explosive momentum. Get the inside scoop here

KeyBanc Capital Markets initiated coverage on Elanco Animal Health Incorporated (NYSE:ELAN).

The company’s recent Innovation Products launches (Zenrelia and Credelio Quattro) are showing strong revenue growth, the analyst said in a note.

Analyst Steve Decher expects these and other Innovation Products to continue to drive revenue growth over the next few years (6-8% annual growth from 2025-2028 vs. low single digit from 2022-2024).

Also Read: Elanco Animal Health Gets Its Bite Back, Pipeline Efforts Earn Praise

The analyst also expects margin expansion from a higher Companion Animal revenue mix and from the cost savings program.

Elanco’s trailing leverage ratio is down from ~5.5x in 2023 to ~4x currently, and KeyBanc expects further leverage improvement from increased profitability/cash generation.

Analyst Forecast

KeyBanc initiated with an Overweight rating and a price forecast of $27. The analyst currently considers shares of Elanco to be undervalued.

Elanco shares are trading at a ~21x forward P/E multiple, which is a premium to its two-year average of ~15.5x.

However, KeyBanc on Thursday wrote that Elanco’s higher expected revenue growth, expanding margins, and improved balance sheet warrant a higher multiple.

Elanco reported third-quarter 2025 results on Wednesday, posting adjusted earnings per share of 19 cents, up 46% year over year.

Earnings exceeded both the company’s guidance range of 12-16 cents and the consensus estimate of 13 cents.

Revenue came in at $1.14 billion, surpassing the consensus estimate of $1.09 billion and exceeding management’s guidance of $1.08 billion to $1.11 billion.

ELAN Price Action: Elanco Animal Health shares were up 3.84% at $22.05 at the time of publication on Friday. The stock is approaching its 52-week high of $23.09, according to Benzinga Pro data.

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