Neogen Stock Soars Nearly 30% on Strong Earnings, Raised Outlook
The food and animal safety firm's better-than-expected results and an improved forecast suggest its turnaround strategy, including the pivotal 3M unit integration, is gaining traction.
Shares of Neogen Corp. (NEOG) surged nearly 30% on Thursday after the company posted fiscal second-quarter results that significantly outpaced analyst expectations and raised its full-year financial outlook, fueling investor optimism that its long-awaited turnaround is taking hold.
The Lansing, Michigan-based company, which specializes in food and animal safety, saw its stock climb as high as 33%, closing the trading day up 27.12% at $9.38. The dramatic rally positions the stock well above the average pre-earnings analyst price target of approximately $8.83.
For its second quarter of fiscal year 2026, Neogen reported a core organic revenue growth of 2.9% year-over-year, contributing to a total revenue of $224.7 million. This figure comfortably surpassed consensus estimates that hovered around $208 million. The performance signaled a robust expansion in profitability, with adjusted EBITDA reaching $48.7 million, representing a margin of 21.7%.
The bottom line delivered an even greater surprise. Neogen announced an adjusted earnings per share (EPS) of $0.10, more than tripling the consensus forecast of $0.03 per share, according to data from Investing.com. The strong showing provided the company with the confidence to lift its full-year revenue guidance to a range of $845 million to $855 million.
The results are being interpreted by the market as a crucial turning point for Neogen, which has been navigating a complex and costly integration of the Food Safety Division it acquired from 3M. That acquisition was intended to cement Neogen’s leadership in the industry, but the process has weighed on performance and investor sentiment.
Thursday’s positive report indicates the company is beginning to realize the strategic benefits of the merger. “Neogen shares skyrocketed as Q2 earnings beat signals turning point in 3M integration strategy,” noted one financial market report, highlighting the renewed confidence in the company's direction.
Prior to the announcement, Wall Street maintained a cautious stance, with most analysts rating the stock as a “Hold.” While the company’s market capitalization stands at a solid $1.61 billion, its trailing twelve-month earnings per share were negative, underscoring the challenges of the past year. This week’s performance, however, suggests a decisive shift in its financial trajectory.
In its announcement before the market opened, Neogen's management team emphasized the return to core growth and improved profitability as key achievements for the quarter. Investors will now be watching closely to see if the company can maintain this momentum and continue to deliver on its promise of a successful, growth-oriented future post-integration.