Neogen Chemicals Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's been a pretty great week for Neogen Chemicals Limited (NSE:NEOGEN) shareholders, with its shares surging 16% to ₹2,173 in the week since its latest third-quarter results. It looks like a pretty bad result, all things considered. Although revenues of ₹2.0b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 22% to hit ₹3.80 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Neogen Chemicals

Taking into account the latest results, the consensus forecast from Neogen Chemicals' seven analysts is for revenues of ₹12.2b in 2026. This reflects a major 58% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 68% to ₹31.46. Before this earnings report, the analysts had been forecasting revenues of ₹12.7b and earnings per share (EPS) of ₹35.44 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of ₹2,408, suggesting the downgrades are not expected to have a long-term impact on Neogen Chemicals' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Neogen Chemicals analyst has a price target of ₹3,150 per share, while the most pessimistic values it at ₹1,860. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Neogen Chemicals shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neogen Chemicals' past performance and to peers in the same industry. It's clear from the latest estimates that Neogen Chemicals' rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 21% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Neogen Chemicals is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Neogen Chemicals. They also downgraded Neogen Chemicals' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at ₹2,408, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Neogen Chemicals going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Neogen Chemicals (1 is a bit unpleasant!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.