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Sunday share tips: Eco Animal Health, Intertek

Sun, 30th Jun 2024 11:40

(Sharecast News) - The Financial Mail on Sunday's Midas column tipped shares of Eco Animal Health to its readers, touting the company's animal drug pipeline.

Long-term prospects for the firm were robust, Midas said, with sales seen rising to nearly £93m in the current year and to over £100m in 2026.

Profits were growing alongside and the rate of growth should increase as new drugs hit the market.

Eco's main product was the antibiotic Aivlosin, which had the benefit of only being used for short periods and with minimal dosage when animals were truly sick.

But the company had several other drugs that were set to come to market, including two vaccines in 2025.

Together those vaccines should generate annual sales of around £30m and several more were set to start being marketed before 2030.

"Eco Animal Health has been through tough times but long-term prospects are robust, as CEO David Hallas has ambitious plans for growth and is on track to deliver them. At £1.23, the shares are a buy."

The Sunday Times's Lucy Tobin recommended shares of Intertek.

In her opinion, the shares were set to get a boost from the company's increase in its targeted dividend payout ration to roughly 65% of earnings starting from 2024.

Furthermore, the global thirst for compliance and testing was only going to increase.

At 21 estimated earnings Intertek's shares were "not at all cheap", she conceded, although that multiple was about a tenth below its historical average.

Indeed, analysts at UBS expected the shares to recover the 5,900p mark in 12 months' time.

Like-for-like sales meanwhile had grown by 6% over the year ending in March, its best showing in a decade.

"And as global demand for product regulation, testing and accreditation keeps accelerating - the trend is, basically, for more health and safety - Intertek looks increasingly appealing."

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