Elanco shares rise 8.6% after 2026 forecast raise
Elanco (ELAN) shares rise 8.6% after topping Q3 EPS estimates, 27 cents against 21 cents, and raising 2026 guidance. Revenue of $1.265 billion beat the $1.23 billion consensus estimate.
Key takeaways
- Elanco (ELAN) reported third-quarter 2026 revenue of $1.265 billion, up 11% from a year earlier, and adjusted EPS of 27 cents, against 21 cents expected. It raised full-year 2026 adjusted EPS guidance to $1.17 to $1.20 and adjusted EBITDA guidance to $1.05 billion to $1.065 billion.
Elanco (ELAN) raised its 2026 guidance after reporting third-quarter revenue of $1.265 billion, up 11% from a year earlier.
Shares rose 8.6% at 3:59 p.m. ET, from a $23.68 close.
Revenue beat the $1.23 billion consensus estimate.
Here's how the company did:
- Revenue: $1.265 billion vs. $1.137 billion a year earlier
- Adjusted EPS: 27 cents vs. 19 cents a year earlier, 21 cents expected
- Adjusted EBITDA: $243 million vs. $198 million a year earlier
- Reported net income: $18 million, or 4 cents per diluted share, vs. a loss of $34 million a year earlier
Adjusted EBITDA rose 23%, and its margin reached 19.5%, from 17.5%.
Organic constant currency revenue grew 9%, led by Pet Health.
2026 guidance
Full-year revenue guidance rose to $5.155 billion to $5.18 billion, from $5.09 billion to $5.14 billion. Adjusted EBITDA guidance rose to $1.05 billion to $1.065 billion, from $1.01 billion to $1.035 billion. Adjusted EPS guidance moved to $1.17 to $1.20, from $1.10 to $1.16.
For the fourth quarter, the company expects revenue of $1.19 billion to $1.215 billion, adjusted EBITDA of $185 million to $200 million, and adjusted EPS of 16 cents to 19 cents.
The net leverage ratio was 2.9x adjusted EBITDA at quarter-end, down from 3.1x at the end of the second quarter.
“Reaching this key milestone earlier than anticipated now unlocks accelerated capital allocation flexibility,” said CFO Bob VanHimbergen.
Segment results
Pet Health revenue rose 14% to $608 million. Farm Animal revenue rose 6% to $631 million, with Cattle up 17% to $339 million while Poultry fell 7% to $201 million.
Adjusted gross margin rose 300 basis points to 56.1%.
Costs and cash
Operating expenses rose 12% to $492 million, driven by higher marketing, selling and administrative costs. Interest expense was $59 million, up $7 million from a year earlier. Cash from operations was $216 million, compared with $219 million a year earlier.
Net income has moved from a loss of $276.0 million in the fourth quarter of 2025 to a profit of $57.0 million in the first quarter of 2026.