Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Elanco Animal Health Incorporated has demonstrated a strong start to 2024 with positive developments in multiple areas of its business, despite facing some challenges.</li><li>The company has achieved encouraging financial and operational results, underscored by success in its strategic initiatives aimed at enhancement and innovation.</li><li>Starting with the financials, Elanco surpassed its revenue, adjusted EBITDA, and adjusted EPS guidance for Q1 2024, indicating robust underlying business performance.</li></ul>

Elanco Animal Health Incorporated has demonstrated a strong start to 2024 with positive developments in multiple areas of its business, despite facing some challenges.The company has achieved encouraging financial and operational results, underscored by success in its strategic initiatives aimed at enhancement and innovation.Starting with the financials, Elanco surpassed its revenue, adjusted EBITDA, and adjusted EPS guidance for Q1 2024, indicating robust underlying business performance.

Elanco Animal Health Incorporated: Will The Accelerated Global Rollout of Zenrelia Boost Its Top-Line? - Major Growth Drivers

External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

<ul><li>Elanco Animal Health Inc is a leading global provider of pharmaceutical products for Companion Animals and Farm Animals</li><li>Stock has declined around 50% since early 2020 due to challenges such as the Covid pandemic and disappointing guidance for FY 2022</li><li>Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for those willing to weather industry turbulence</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Elanco Animal Health Inc is a leading global provider of pharmaceutical products for Companion Animals and Farm AnimalsStock has declined around 50% since early 2020 due to challenges such as the Covid pandemic and disappointing guidance for FY 2022Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for those willing to weather industry turbulenceThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Elanco Animal Hlth Inc (ELAN) - Wednesday, Feb 7, 2024

<ul><li>In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business, improved conditions in the European Pet Health retail market, and increased pricing.</li><li>The strong performance in 2023 indicates that the company's innovation, portfolio, and productivity strategy are working, leading to confidence in the potential success of future investments.</li><li>Going into 2024, the company aims to focus on three priorities: sustained revenue growth, innovation, and improved cash conversion.</li></ul>

In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business, improved conditions in the European Pet Health retail market, and increased pricing.The strong performance in 2023 indicates that the company's innovation, portfolio, and productivity strategy are working, leading to confidence in the potential success of future investments.Going into 2024, the company aims to focus on three priorities: sustained revenue growth, innovation, and improved cash conversion.

Elanco Animal Health: Initiation Of Coverage - A Story Of Concentration on Pet Health and Livestock Sustainability! - Major Drivers

Global Healthcare Analyst

Tina Banerjee

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dechra-pharmaceuticals-plc" target="_blank" data-smartkarma-citation="entities:21908:1" rel="noopener">Dechra Pharmaceuticals (DPH LN)</a> received an offer from the Swedish private equity firm EQT regarding a possible all-cash deal, where Dechra shareholders would receive £40.70 per ordinary share in cash.</li>
<li>Right after the announcement, Dechra shares surged 33%. The shares are currently trading at £37.66, implying 10% upside potential.</li>
<li>Without EQT offer, based on current financial performance, Dechra has a bleak outlook. Currently, Dechra has average target price of £39.39, implying a spread of just ~5%.</li>
</ul>



Dechra Pharmaceuticals (DPH LN) received an offer from the Swedish private equity firm EQT regarding a possible all-cash deal, where Dechra shareholders would receive £40.70 per ordinary share in cash.
Right after the announcement, Dechra shares surged 33%. The shares are currently trading at £37.66, implying 10% upside potential.
Without EQT offer, based on current financial performance, Dechra has a bleak outlook. Currently, Dechra has average target price of £39.39, implying a spread of just ~5%.


Dechra Pharmaceuticals (DPH LN): Best Case Scenario Offers 10% Upside Potential

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

ZoomInfo Technologies  / Equity Bottom-Up

<ul>
<li>This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.  </li>
<li>They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts.  When the company’s issues become well-known, there is often multiple compression as well as a rerating.</li>
<li>These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.</li>
</ul>


This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.  
They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts.  When the company’s issues become well-known, there is often multiple compression as well as a rerating.
These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.


Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer

United States

Intra-Cellular Therapies Inc. researches and develops biopharmaceutical drugs. The Company engages in the research and development of small molecule drugs to treat neuropsychiatric and neurological diseases and other disorders of the central nervous system. Intra-Cellular Therapies offers its products to the medical industry.

Reata Pharmaceuticals, Inc. operates as a biopharmaceutical company. The Company focuses on identifying, developing, and commercializing product candidates that modulate the activity of key regulatory proteins involved in the biology of mitochondrial function, oxidative stress, and inflammation to address the unmet medical needs of patients with various life-threatening diseases.

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

Corcept Therapeutics Inc. is a pharmaceutical company that discovers and develops drugs for the treatment of severe metabolic and psychiatric disorders. The Company's lead product modulates the effect of cortisol, also known as the "stress hormone", by selectively blocking the binding of cortisol to one of its two known receptors, the GR-II receptor.

Prestige Brands Holdings, Inc. distributes over-the-counter healthcare and household cleaning products to retail stores in the United States, Canada and other international markets.  The Company distributes oral, eye and skin care; cough, cold, allergy and sinus; and household cleansers, sponges, scrubbers and cleaning pads.

Axsome Therapeutics, Inc. operates as a biopharmaceutical company. The Company focuses on developing therapies for pain, neurological disorders, and other central nervous system. Axsome Therapeutics serves patients worldwide.

Catalent, Inc. provides delivery technologies and development solutions for drugs, biologics and consumer health products. The Company's oral, injectable, and respiratory delivery technologies address the diversity of the pharmaceutical industry including small molecules, large molecule biologics and consumer health products.

Amneal Pharmaceuticals, Inc. operates as a pharmaceutical company. The Company specializes in developing, manufacturing, marketing, and distributing generic and biosimilar pharmaceutical products. Amneal Pharmaceuticals serves clients worldwide.

Supernus Pharmaceuticals Inc. is a specialty pharmaceutical company. The Company develops and markets proprietary drugs for the treatment of central nervous system diseases and disorders. Supernus has developed a portfolio of clinical stage drugs to address neurological and psychological problems such as epilepsy, conduct disorder, Parkinson's disease, ADHD, depression and anxiety.

Amphastar Pharmaceuticals, Inc. develops and manufactures generic and proprietary injectable and inhaleable pharmaceutical products.

Sino Biopharmaceutical Limited, through its subsidiaries, researches, develops, produces, and sells biopharmaceutical products for the medical treatment of ophthalmia, as well as modernized Chinese medicine and chemical medicine for the treatment of hepatitis.

Changchun High & New Technology Industry (Group) Inc. is an investment holding company.  Through its subsidiaries, the Company manufactures biopharmaceuticals and Chinese traditional medicines, constructs infrastructure facilities, manufactures electrolytic condensers, and develops and manages real estate.

ROHTO PHARMACEUTICAL CO., LTD. manufactures and markets pharmaceuticals and cosmetics products.  The Company's products include eyewash, bath soaps, gastrointestinal medicine, and hand cream.  Rohto Pharmaceutical also has a license agreement with its subsidiary, Mentholatum (US) to sell their brand products.  The Company also manufactures contact lenses and health foods.

Sichuan Kelun Pharmaceutical Co., Ltd. manufactures pharmaceutical products. The Company's products include large infusion products, tablets, capsules, antibiotic injection, lyophilized powder for injection, and traditional Chinese medicine.

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. manufactures and markets medicines, healthcare products, and medical instruments.  Through its subsidiaries, the Company also operates in pharmaceutical trading, printing, food manufacturing, real estate development, and provides medical services.

China Resources Sanjiu Medical & Pharma (000999 CH)

Dong-E-E-Jiao Co., Ltd. primarily manufactures and sells traditional Chinese medicine, health care products, health foods, and bio-medicine. The company also engages in gelatin products manufacturing.

Glaxosmithkline Pharmaceuticals Ltd. manufactures and distributes a wide variety of pharmaceutical drugs, veterinary products and laboratory chemicals. The Company's products include "Phexin" capsules, "Betnesol" tablets and injections, "Becoride" asthma treatment, "Betnovate" ointment, "Cetzine" antihistamine, "Zucox" and "Rizap" anti-tuberculosis products.

Glaxosmithkline Pharmaceuticals (GLXO IN)

ONO PHARMACEUTICAL CO., LTD. manufactures and sells pharmaceuticals.  The Company mainly researches and develops prescription drugs.

Abbott India Limited manufactures a wide range of pharmaceutical and medical products, agrochemicals, and animal health products. The Company's medical and pharmaceutical products include insulin injections, anti-dysentery drugs, vitamin preparations, penicillin preparations, sulfonamide tablets, and a variety of household remedies.

Glenmark Pharmaceuticals Ltd., is a pharmaceutical company. The Company develops generic drugs for inflammation, metabolic disorders, and pain.

Elanco Animal Health Incorporated operates as an animal health care company. The Company develops, manufactures, and markets products for companion and food animals. Elanco Animal Health serves clients worldwide.

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Elanco Animal Health (ELAN US)

Elanco Animal Health Incorporated: Will The Accelerated Global Rollout of Zenrelia Boost Its Top-Line? - Major Growth Drivers

Elanco Animal Health Incorporated has demonstrated a strong start to 2024 with positive developments in multiple areas of its business, despite...

Baptista Research

Elanco Animal Hlth Inc (ELAN) - Wednesday, Feb 7, 2024

Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for...

Value Investors Club

Elanco Animal Health: Initiation Of Coverage - A Story Of Concentration on Pet Health and Livestock Sustainability! - Major Drivers

In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business,...

Baptista Research

Dechra Pharmaceuticals (DPH LN): Best Case Scenario Offers 10% Upside Potential

Dechra received takeover offer from private equity firm EQT for £40.70 per share all-cash deal. Current price implies ~10% spread. EQT has until 11...

Tina Banerjee

Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer

Earnings Quality shorts lead to idiosyncratic alpha. Today, we show our model rankings and highlight ZoomInfo, Gogo, Elanco Animal Hlth, Sonos,...

Eric Fernandez, CFA

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