Virbac - A solid business model capable of absorbing a large proportion of R&D costs, to accelerate future growth
H1 results down slightly due to higher R&D costs, but well above our expectations, which had been lowered after the profit warning in early July.Confirmed annual guidance implies a very sharp deterioration in H2 margins (sequentially and vs. H2 2022), despite good prospects.Probably some good surprises to come in terms of margins.Valuation multiples remain affordable compared with historical transactions in the sector and with the main listed players.Buy opinion maintained and target price slightly lowered to €320/share.Virbac is an independent veterinary pharmaceutical laboratory. Co. develops and provides veterinarians and farmers with medicines and vaccines that improve the health of food producing animals. Co. markets a range of products designed for pets and livestock. It offers seven types of products for companion animals (Parasiticides, Immunology, Antibiotics/dermatology, Specialties, Equine, Specialized pet food and Other products), and four types of products for food producing animals (Bovine parasiticides, Bovine products (excluding parasiticides), Pig/poultry antibiotics and Other products). Co. markets its products in the ethical (veterinarian) and OTC markets.
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