As Bob Seger said, “There I go, turn the page”, 2025 is behind us and hope springs eternal for 2026.
But let’s not completely turn our backs on 2025. The annual reporting cycle will begin in late January or early February. Our analysis of company performance shows that the industry will post mid-single digit revenue growth along the lines of historical rates. Despite the solid revenue growth, the investment returns for the publicly traded companies largely lagged benchmark indices. The S&P 500 and Dow Jones Industrials posted growth of 16% and 13%, respectively, whereas the Petcare ETF showed growth of only 1%.
Now, it should not be lost that the returns for the S&P 500 are dominated by the “Magnificent 7” stocks. While in total the S&P 500 posted growth of 15%, estimates indicate that the growth would be about half of that if you excluded the MAG 7, which is fueled by the investment in AI. Toward the end of 2025, the markets saw a rotation out of the MAG 7 into smaller stocks, especially as the interest rate environment continues to be more favorable.
Animal health company stocks should have a better year in 2026, especially those companies who are in the early stages of an innovation cycle. In fact, we will talk about company performance and innovation at our Industry Overview presentations at VMX and WVC. See you there.
Randy Freides
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