What Happened?
Shares of animal health company Elanco (NYSE:ELAN) rose in the morning session after JP Morgan upgraded the company's stock from "Neutral" to "Overweight" and raised its price target. The analyst, Chris Schott, increased the price target from $18.00 to $24.00. The upgrade was reportedly driven by an attractive innovation cycle and successful product launches. For instance, the company's parasite protection product, Credelio Quattro, reached $100 million in net sales in under eight months. Analysts noted that Elanco's promising portfolio of new products, including future items like Zenrelia, was expected to boost growth.
After the initial pop the shares cooled down to $20.86, up 0.9% from previous close.
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What Is The Market Telling Us
Elanco’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 1.4% on the news that Stifel raised its price target on the company's shares to $23 from $18 while keeping a Buy rating, pointing to a strong outlook for product growth.
The investment firm's analysis found that Wall Street's longer-term profit margin estimates appeared too low and noted potential for higher-than-expected revenue. Stifel projected that new and recently launched products could drive significant revenue growth in 2026. For example, the firm expected the market share for its product Credelio Quattro to reach nearly 17% in the U.S. by that year.
Elanco is up 73.1% since the beginning of the year, and at $20.86 per share, has set a new 52-week high. Investors who bought $1,000 worth of Elanco’s shares 5 years ago would now be looking at an investment worth $650.48.
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