Neogen Chemicals Limited Just Beat EPS By 69%: Here's What Analysts Think Will Happen Next
A week ago, Neogen Chemicals Limited (NSE:NEOGEN) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of ₹2.5b, some 9.2% above estimates, and statutory earnings per share (EPS) coming in at ₹6.29, 69% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Neogen Chemicals' nine analysts is for revenues of ₹13.0b in 2027. This reflects a huge 40% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 62% to ₹21.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹12.0b and earnings per share (EPS) of ₹17.67 in 2027. So it seems there's been a definite increase in optimism about Neogen Chemicals' future following the latest results, with a solid gain to the earnings per share forecasts in particular.
View our latest analysis for Neogen Chemicals
With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to ₹2,167per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Neogen Chemicals at ₹2,654 per share, while the most bearish prices it at ₹1,455. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Neogen Chemicals' growth to accelerate, with the forecast 57% annualised growth to the end of 2027 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Neogen Chemicals to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Neogen Chemicals following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Neogen Chemicals. Long-term earnings power is much more important than next year's profits. We have forecasts for Neogen Chemicals going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Neogen Chemicals that you should be aware of.
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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.