Elanco Animal Health: Not Expensive, But Debt Remains An Issue
- Elanco Animal Health's stock is not a good investment due to high debt levels, despite potential undervaluation and recent growth in dermatology market.
- Quarterly results showed a decline in revenue and adjusted EPS, with both major segments reporting year-over-year revenue drops.
- The company's growth has been driven mainly by acquisitions, leading to high debt, which limits future growth opportunities and investments.
- Despite potential for margin improvement and new product contributions, the high debt levels make Elanco a "Hold" rather than a "Buy".
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Stock prices in the short-to-mid-term (several quarters or a few years) are mostly driven by sentiment and one example demonstrating this quite well in the last few years was Elanco Animal Health Incorporated (NYSE:ELAN). In September 2020,
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