Shares of animal health company Elanco (NYSE:ELAN) jumped 4.4% in the morning session after the company announced it will be joining the S&P MidCap 400 index.

The animal health company is set to replace Sarepta Therapeutics in the index, with the change becoming effective before the market opens on Tuesday, September 2. This inclusion is a significant positive catalyst because it typically forces index funds and exchange-traded funds (ETFs) that track the S&P MidCap 400 to purchase shares of Elanco to align their portfolios. The anticipated increase in demand from these institutional investors is expected to boost the stock's liquidity and valuation. Reflecting the positive sentiment, the company's shares also touched a new 52-week high.

After the initial pop the shares cooled down to $18.60, up 3.9% from previous close.

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Elanco’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 4 months ago when the stock gained 21.2% on the news that the company reported decent first quarter 2025 results which beat analysts' EPS expectations and included constant currency revenue outperformance. Organic sales were up 4%, thanks to strong demand in cattle health and good traction from new pet meds like Credelio Quattro. Even though sales were flat, operating margins improved, a sign they're managing prices and costs pretty well. On the other hand, its full-year EBITDA guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations.

Elanco is up 54.3% since the beginning of the year, and at $18.60 per share, has set a new 52-week high. Investors who bought $1,000 worth of Elanco’s shares 5 years ago would now be looking at an investment worth $661.12.

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