Neogen Lifts 2026 Forecast on Cost-Cutting Success
Food and animal safety specialist tops Q2 estimates and shows progress on its strategic transformation, boosting investor confidence.
Neogen Corporation (NEOG) raised its full-year revenue forecast on Thursday after reporting better-than-expected quarterly results, offering the first clear sign that its sweeping cost-cutting program and strategic overhaul are taking hold.
Investors welcomed the news, signaling confidence in the company's turnaround efforts. The food and animal safety company now projects revenue for its 2026 fiscal year to be between $845 million and $855 million, an increase from its prior estimate of $820 million to $840 million.
The updated outlook followed a second-quarter report that surpassed analyst expectations. Neogen posted adjusted earnings of $0.10 per share on revenue of $224.7 million. This beat the consensus estimate of $0.07 per share, according to analyst data. While total revenue saw a slight year-over-year decline of 2.8%, the company emphasized a core revenue growth of 2.9%, underscoring stabilization in its primary business lines.
"Our second-quarter results are a testament to the team's commitment to executing our strategic plan," said John Adent, Neogen's President and CEO, in a statement. "We are seeing the benefits of our operational initiatives, which are driving margin improvement and enabling us to invest in key growth areas."
The positive results are a crucial milestone for Neogen, which has been undergoing a significant transformation. The company is in the process of integrating the food safety business it acquired from 3M, a move that expanded its portfolio but also brought integration challenges. In response, Neogen announced a restructuring plan in October 2025 aimed at delivering approximately $20 million in annualized cost savings.
That plan, which included a global headcount reduction and manufacturing optimization, appears to be yielding results faster than anticipated, contributing directly to the improved profitability and optimistic forecast. According to the company's earnings release, the improved performance was driven by disciplined expense management and early success from its transformation initiatives.
Shares of the Lansing, Michigan-based company have been under pressure over the past year, trading in a 52-week range of $3.87 to $12.97. The company, which has a market capitalization of approximately $1.61 billion, has been working to regain investor trust after a period of declining margins and post-acquisition struggles.
Wall Street remains cautiously optimistic. The consensus rating from analysts is a "Hold," though the average price target of $8.17 suggests potential upside from its current levels. The stronger-than-expected quarter and increased guidance could lead to revised analyst ratings in the coming days.
Looking ahead, investors will be watching closely to see if Neogen can maintain its cost-cutting momentum and translate core revenue growth into sustained profitability. The company's ability to fully integrate and monetize the acquired Petrifilm product line from 3M remains central to its long-term value proposition in the competitive food safety and animal health sectors.