Animal Health: Paws for Thought

Research evidence excerpt

Animal Health: Paws for Thought

EUROPE | Specialty Pharmaceuticals EquityJulyResearch9, 2026

KEY STOCKS FEATURED INCLUDE:Animal Health: Paws for Thought

We update VIRP ahead of 1H & CVSG ahead of FY26. We retain our Hold TICKER RATING PRICE TARGET

ratings as we believe consumer concerns and a lack of catalysts in a CVSG LN HOLD 1,350.00p

momentum market continue to weigh on investor confidence. We lower VIRP FP HOLD €361.00

EPS by 0-4% NT for VIRP and lower PT to €361. We raise CVSG Adj. EPS by

c.3-5% and our lower PT to 1350p.

KEY CHANGES INCLUDE:

VIRP Revenues raised by 1-4% & Adj. EBIT tweaked by c. -1% to +2%: We raise revenues TICKER RATING PRICE TARGET

following a strong start to the year (note solid volumes (c.6%) and price (c.2%), and strong

CVSG LN HOLD 1,350.00p (1,420.00p)

North America), but this was offset by a more material FX headwind at Q1 of -5.5%. VIRP guides

to 5.5-7.5% top-line growth in CER and scope (vs JEFe 6.8%) and a 2026 Adj. EBIT margin VIRP FP HOLD €361.00 (€368.00)

of c.17% CER and scope (vs. JEFe 16.9%). In 2025, margins were resilient despite several

operational headwinds. Mgmt highlighted that a strong 1Q “continued to give confidence” in

2026 targets, which were reiterated. The targeted c.100bps margin improvement in FY26 is

largely visible with c.50bps expected to come from the reversal of a temporary disruption to

antigen production that weighed on FY25 profitability, while the recently acquired Thyronorm

franchise and efficiency measures support margin accretion in FY26. Mgmt reiterated that it

can deliver margin expansion while maintaining elevated R&D investments in FY26, expecting

to continue R&D & licensing at >8% of Sales in FY26.

VIRP EPS lowered by 0-4%; PT lowered €361. Our EPS changes reflect minor changes below

EBIT.