20210531-未知机构-Animal_Tracks_Animal_Health_Industry_Primer_59页_2mb
报告摘要
Animal Health Industry Summary
Core Content
The Animal Health industry is presented as an attractive and resilient niche within the healthcare sector. It is distinguished by its independence from many of the risks that affect the human healthcare industry, such as third-party payors, reimbursement issues, and the threat of generic drugs. This makes it a relative safe haven and a more predictable investment opportunity.
Main Viewpoints
- Resilience and Growth: The animal health industry shows strong fundamentals with increasing demand for veterinary services and products. This is driven by rising pet adoption, pet prescription trends, and the need for more efficient livestock production.
- Market Segmentation: The global market is split into two main segments: companion animal and production animal. The companion animal segment is valued at ~$13 billion, growing at mid-to-high single digits. The production animal segment is worth $20 billion, growing at low-to-mid-single digits.
- Industry Drivers: Key drivers include global population growth, increased meat and dairy consumption, food safety concerns, and the modernization of animal production. In emerging markets, rising affluence is expected to drive demand for quality protein.
- R&D and Development: The R&D process in the animal health industry is faster, less costly, and more predictable than in human health. Products are typically approved based on placebo-controlled trials rather than against existing standards of care, and development costs are significantly lower.
Key Information
Animal Health Companies
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| Zoels | ZTS | Outperform | $206 | 17% | $176.69 | $83,857 | 1,687 | $7,587 / $8,050 | $4.50 / $5.00 | $3,173 / $3,474 | 11.1x / 10.4x | 11.5x / 10.9x | 27.6x / 25.2x | 0.6% |
| IDEXX Laboratories | IDXX | Outperform | $576 | 2% | $566.66 | $49,041 | 353 | $3,092 / $3,390 | $7.55 / $8.63 | $951 / $1,068 | 15.9x / 14.5x | 16.0x / 14.6x | 75.1x / 65.6x | - |
| Elanco Animal Health | ELAN | Outperform | $38 | 12% | $33.90 | $16,565 | 3,595 | $4,705 / $4,867 | $1.03 / $1.30 | $1,080 / $1,228 | 3.5x / 3.4x | 4.7x / 4.6x | 33.0x / 26.0x | 20.6x / 18.1x | - |
| Phibro Animal Health | PAHC | Neutral | $25 | -14% | $29.19 | $1,187 | 145 | $832 / $866 | $1.17 / $1.33 | $108 / $117 | 1.4x / 1.4x | 1.5x / 1.5x | 25.0x / 21.9x | 11.8x / 10.9x | 1.6% |
| Genus plc | GNS-GB | - | - | - | $53.10 | $3,468 | 83 | $589 / $632 | $1.07 / $1.17 | $113 / $124 | 5.9x / 5.5x | 6.1x / 5.6x | 49.7x / 45.2x | 31.6x / 28.8x | - |
| Neogen | NEOG | - | - | - | $44.89 | $4,821 | 323 | $487 / $527 | $0.64 / $0.72 | $103 / $115 | 9.9x / 9.1x | 9.2x / 8.5x | 70.3x / 62.2x | 43.5x / 39.0x | - |
| Dechra Pharmaceuticals | DPH-GB | - | - | - | $42.76 | $4,627 | 308 | $616 / $664 | $1.09 / $1.17 | $176 / $190 | 7.5x / 7.0x | 7.7x / 7.2x | 39.4x / 36.4x | 26.9x / 25.0x | - |
| Virbac | VIRP-FR | - | - | - | $267.00 € | 2,258 € | 6 | 973 € / 1,028 € | 8.91 € / 9.70 € | 166 € / 176 € | 2.3x / 2.2x | 2.3x / 2.1x | 30.0x / 27.5x | 13.2x / 12.4x | - |
| Vetbuquinol | VETO-FR | - | - | - | $107.40 € | 1,276 € | 2 | 482 € / 505 € | 3.75 € / 4.15 € | 93 € / 100 € | 2.6x / 2.5x | 2.6x / 2.5x | 28.6x / 25.9x | 13.7x / 12.7x | - |
| ImmuCell | ICCC | - | - | - | $9.75 | $75 | 14 | #N/A | #N/A | #N/A | #N/A | - | - | - | - | - |
| Haska | HSKA | - | - | - | $202.97 | $2,116 | 62 | $245 / $272 | $0.23 / $1.14 | #N/A | #N/A | #N/A | #N/A | #N/A | - |
Distributors & Supply Chain Services
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| Paterson Companies | PDCO | Outperform | $41 | 16% | $35.42 | $3,430 | 788 | $5,804 / $5,941 | $2.07 / $2.23 | $311 / $332 | 0.6x / 0.6x | 0.7x / 0.7x | 17.1x / 15.9x | 12.2x / 11.4x | 2.9% |
| Covetrus | CVET | Neutral | $29 | 6% | $27.47 | $3,667 | 741 | $4,467 / $4,749 | $0.95 / $1.16 | $246 / $290 | 0.8x / 0.8x | 1.0x / 0.9x | 28.9x / 23.8x | 18.1x / 15.3x | - |
| Petmed Express | PETS | Underperform | $24 | -31% | $34.71 | $696 | 1,101 | $308 / $317 | $1.68 / $1.76 | $45 / $47 | 2.3x / 2.2x | 1.9x / 1.9x | 20.6x / 19.7x | 13.1x / 12.5x | 3.2% |
| PetQ | PETQ | - | - | - | $38.98 | $1,106 | 472 | $959 / $1,076 | $1.58 / $2.14 | $101 / $117 | 1.2x / 1.0x | 1.5x / 1.4x | 24.7x / 18.2x | 14.4x / 12.4x | - |
Retail
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| Chewy | CHWY | Outperform | $121 | 56% | $77.77 | $32,043 | 3,156 | $8,771 / $10,641 | $0.03 / $0.23 | $168 / $266 | 3.7x / 3.0x | 3.6x / 3.0x | 2434.2x / 187.9x | 187.9x / 118.5x | - |
| Petco | WOOF | Neutral | $28 | 16% | $24.09 | $5,456 | 2,723 | $5,451 / $5,815 | $0.72 / $0.81 | $546 / $584 | 1.0x / 0.9x | 1.5x / 1.4x | 33.6x / 29.7x | 15.3x / 14.3x | - |
| Zooplus | ZOI-DE | - | - | - | $246.80 € | $1,764 € | 20 € | $2,088 € / $2,417 € | 2.93 € / 4.21 € | $65 € / $82 € | 0.8x / 0.7x | 0.8x / 0.7x | 84.2x / 58.7x | 26.7x / 21.3x | - |
| Pets at Home | PETS-GB | - | - | - | $4.46 | $2,232 | 1,060 | $1,173 / $1,224 | $0.18 / $0.21 | $238 / $259 | 1.9x / 1.8x | 2.3x / 2.2x | 25.1x / 21.1x | 11.1x / 10.2x | - |
| Tractor Supply | TSCO | - | - | - | $181.04 | $20,866 | 963 | $11,595 / $12,101 | $7.35 / $7.74 | $546 / $584 | 1.8x / 1.7x | 2.0x / 1.9x | 24.6x / 23.4x | 16.7x / 15.9x | 1.1% |
| CVS Group | CVSG-GB | - | - | - | $21.55 | $1,524 | 286 | $517 / $550 | $0.71 / $0.77 | $96 / $102 | 3.3x / 2.9x | 3.3x / 2.9x | 30.3x / 28.0x | 17.6x / 16.5x | - |
Food & Consumer Staples
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| General Mills | GIS | - | - | - | $62.12 | $37,891 | 3,528 | $17,722 / $17,580 | $3.71 / $3.78 | $3,677 / $3,645 | 2.1x / 2.2x | 2.8x / 2.9x | 16.7x / 16.4x | 13.6x / 13.8x | 3.3% |
| Nestle | NESN-CH | - | - | - | $113.92 | $328,204 | 3,357 | $85,532 / $89,073 | $4.44 / $4.77 | $18,807 / $19,763 | 3.8x / 3.7x | 4.2x / 4.0x | 25.7x / 23.9x | 19.1x / 18.2x | - |
| Freshpot Inc. | FRPT | - | - | - | $168.56 | $7,293 | 352 | $434 / $572 | $0.14 / $0.75 | $62 / $97 | 16.8x / 12.8x | 16.7x / 12.6x | 74.2x / 58.7x | 116.4x / 74.2x | - |
| JM Smucker Co. | SJM | - | - | - | $135.97 | $14,900 | 950 | $7,805 / $7,776 | $8.94 / $9.08 | $1,697 / $1,686 | 1.9x / 1.9x | 2.5x / 2.5x | 15.2x / 15.0x | 11.4x / 11.5x | 2.6% |
| Central Garden & Pet Co | CENTA | - | - | - | $51.66 | $2,205 | 193 | $3,183 / $3,267 | $2.70 / $3.04 | $309 / $330 | 0.7x / 0.7x | 0.7x / 0.7x | 25.1x / 21.1x | 11.1x / 10.2x | - |
| Colgate Palmolive | CL | - | - | - | $82.56 | $69,843 | 3,930 | $17,482 / $18,129 | $3.28 / $3.50 | $4,628 / $4,866 | 4.0x / 3.9x | 4.4x / 4.3x | 25.2x / 23.6x | 16.7x / 15.9x | 2.1% |
Insurance
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| Trupanion | TRUP | - | - | - | $94.94 | $3,803 | 367 | $680 / $857 | $0.71 / $0.77 | $101 / $117 | 2.9x / 2.8x | 3.3x / 3.1x | 30.3x / 28.0x | 17.6x / 16.5x | - |
Pet-Biotech
| Company | Ticker | CS Rating | Price Target | Upside/Downside | 6/9/21 Price | Market Cap | Avg Vol (000's) | Revenue (CY) | EPS (CY) | EBITDA (CY) | P/Sales | EV/Sales | P/E | EV/EBITDA | Dividend Yield |
|---------|--------|----------|-------------|----------------|-------------|-----------|----------------|--------------|---------|----------|----------|--------|---------|-----|-----------|----------------|
| Kindred Biosciences | KIN | - | - | - | $6.55 | $297 | 481 | $20 / $43 | $0.73 / $0.36 | $27 / $23 | - | - | - | - | - |
Corporate Account Consolidation
- Consolidation Trends: Over 20% of US veterinary practices (~5,500) are company-owned, with ongoing consolidation by various entities.
- Types of Consolidation: Includes organic growth-led groups, private equity-backed groups, and groups diversifying into other sectors.
Recent Transactions
| Date | Acquirer | Target | # of Practices | Transaction Value | EV/LTM (Sales) | EV/LTM (EBITDA) |
|---|---|---|---|---|---|---|
| Feb 2021 | EQT | IVC Evidensia | 1,354 | $4,300.0 | 3.6x | - |
| Apr 2020 | TSG Consumer Partners | Pathway Vet Alliance | 356 | $2,000.0 | 5.3x | - |
| Mar 2020 | Destination Pet | VitalPet | 24 | - | - | - |
| Mar 2020 | SAGE Veterinary centers | Mid-Columbia Pet Emergency Service | 1 | - | - | - |
| Jan 2020 | SAGE Veterinary centers | Adobe Animal Hospital | 2 | - | - | 19.2x |
| Jul 2019 | PetIQ | Perrigo Animal Health | - | - | - | - |
| Jun 2019 | Partners Group | Blue River PetCare | 74 | - | - | - |
| Jun 2019 | JAB Investors | National Vet Associates (NVA - Private) | 670 | - | - | - |
| Apr 2019 | Nestle Purina Petcare | IVC Evidensia | - | - | - | - |
| Feb 2019 | JAB Investors | VSNA/Compassion-First | 41 | $1,214.0 | - | 19.2x |
| Dec 2018 | Mars | AniCura | 200 | $2,353.2 | 6.2x | - |
| Sep 2018 | National Veterinary Care (ASX:NVL) | Pet Doctors | 23 | - | - | - |
Summary of Key Trends
- Market Growth: The global animal health market is expected to grow at 5-7% annually, with significant growth in the companion animal segment.
- Resilience During Recession: The animal health industry has shown resilience during economic downturns, with veterinary practice visits recovering quickly post-recession.
- Investment Attraction: The industry is viewed as an attractive alternative investment in healthcare due to its defensive characteristics and less regulatory burden.
- Innovation and Demand: Increasing focus on diagnostics, prevention, and novel therapeutics is driving demand and revenue growth.
- Geographic Drivers: Rising affluence in developing countries, population growth, and modernization of livestock production are key drivers for the production animal segment.
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