Source: Investing
Bank of America remains cautious on the Animal Health sector ahead of second quarter 2026 earnings, citing continued declines in Veterinary visits and increasing competition in companion animal pharmaceuticals. The firm maintained its buy rating on Elanco Animal Health, calling it its top pick because of its stronger potential for earnings estimate increases and favorable catalysts. Bank of America kept neutral ratings on Zoetis and IDEXX Laboratories, noting that while Zoetis is trading at historically low valuations, it continues to face competitive pressures, and IDEXX’s results are expected to meet, rather than exceed, expectations.
VetSource data showed Veterinary visits declined 1.9% year over year during the second quarter, with an estimated 2% decline expected for all of 2026. The report also referenced CATalyst Council’s forecast that Veterinary visits could continue declining into the next decade, contributing to investor concerns. Despite competitive pricing pressures, the bank found no evidence that Zoetis has significantly reduced prices, while Elanco continues to increase prices below Zoetis’ levels.