The U.S. financial services firm believes that adjusted EBIT and free cash flow were the two key metrics to watch. Adjusted EBIT came in at 234 million euros, representing a 16% margin, in line with both market expectations and company guidance. Currency headwinds shaved 50 basis points off the operating margin, while the production halt of one of the group's antigens for facility maintenance cost another 70 basis points.

According to Stifel, Virbac has done an excellent job of controlling its overhead costs. Furthermore, free cash flow reached 93 million euros, significantly exceeding the 80 million euro target. Analysts highlighted the effective management of working capital requirements (WCR) even as capital expenditures increased substantially, as planned, to enhance industrial performance (notably the reshoring of production to France, the establishment of a new warehouse, and the vertical integration of the petfood division).

Regarding the outlook, the group confirmed the targets announced in January, including revenue growth of 5.5% to 7.5% at constant exchange rates, which includes the acquisition of Thyronorm. Stifel analysts believe that, accounting for unfavorable currency effects, the company could achieve approximately 5% revenue growth this year.

In conclusion, analysts believe Virbac offers attractive prospects with an expected compound annual growth rate (CAGR) for earnings per share of approximately 12% over the next three years. Additionally, the stock suffers from a pronounced valuation discount, according to analysts, making it a compelling opportunity within the sector.

The recommendation is a "Buy" with a price target of 440 euros, representing an upside potential of approximately 24% based on Wednesday's closing price.