Elanco Animal Health (NYSE:ELAN) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Elanco Animal Health Incorporated (NYSE:ELAN) is scheduled to report Q3 earnings results on November 6, 2020.

The company is expected to report earnings of $0.13/share on revenue of $922.5 million. The consensus earnings per share (EPS) of $0.13/share is based on a poll of 13 analysts and represents a decline in eps of −58.3% over the same quarter last year, when the company reported earnings of $0.30/share.

The revenue forecast of $922.5 million based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of 19.6%. Last year the company reported $771.3 million in revenue for the quarter.

Expected to report EPS contraction of −58.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $922.48 $771.30 19.6%
EPS $0.13 $0.30 −58.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from Elanco Animal Health Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.07 $0.09 29.3% Beat
Q1, 2020 $0.24 $0.13 −45.5% Missed
Q4, 2019 $0.23 $0.23 0% Met
Q3, 2019 $0.26 $0.30 16.6% Beat
Q2, 2019 $0.26 $0.28 9.8% Beat
Q1, 2019 $0.23 $0.25 10.7% Beat
Q4, 2018 $0.27 $0.29 5.5% Beat
Q3, 2018 $0.25 $0.29 16.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 11.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $21.15 $23.63 11.7% Increase
May 7, 2020 $22.93 $19.84 −13.5% Decline
February 19, 2020 $30.45 $30.23 −0.7% Decline
November 6, 2019 $27.43 $26.92 −1.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.92, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.92 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Elanco Animal Health Incorporated is currently trading at $31.01/share, down −1.6% for the day. The company is trading at approximately 91.0% of its 52-week high of $34.09/share. The company’s stock price is up 31.2% since the last earnings report and down −1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 56.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ELAN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −143.73 and a forward P/E multiple of 66.73.

Elanco Animal Health Incorporated’s current share price also implies a price-to-book (P/B) multiple of 2.20. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $31.01
P/E Ratio −143.7x
P/E Ratio (Fwd) 66.7x
PEG Ratio 0.9
Total Debt / Total Capital 12.7%
Levered Free Cash Flow $240.9 million
EV / EBITDA 29.7x

Finbox

Elanco Animal Health Incorporated is a large-cap stock with a market capitalization of $14.632 billion and a total enterprise value of $15.402 billion. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Elanco Animal Health Incorporated, an animal health company, innovates, develops, manufactures, and markets products for companion and food animals. It offers companion animal disease prevention products, such as parasiticide and vaccine products that protect pets from worms, fleas, and ticks; companion animal therapeutics for pain, osteoarthritis, ear infections, cardiovascular, and dermatology indications in canines and felines; vaccines, antibiotics, parasiticides, and other products for use in poultry and aquaculture production, as well as functional nutritional health products, including enzymes, probiotics, and prebiotics; and a range of vaccines, antibiotics, implants, parasiticides, and other products used in ruminant and swine production. The company sells its products to third-party distributors; veterinarians; and food animal producers, including beef and dairy farmers, as well as pork, poultry, and aquaculture operations in approximately 90 countries in North America, Europe, the Middle East, Africa, Latin America, and the Asia-Pacific. The company has a research and development collaboration with AgBiome, Inc. to develop nutritional health products for swine; and strategic alliance with the Purdue University and Purdue Research Foundation. Elanco Animal Health Incorporated was founded in 1954 and is headquartered in Greenfield, Indiana.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.