Elanco Animal Health Incorporated (NYSE:ELAN) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.2% to hit US$1.2b. Elanco Animal Health also reported a statutory profit of US$0.13, which was an impressive 117% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've discovered 3 warning signs about Elanco Animal Health. View them for free.NYSE:ELAN Earnings and Revenue Growth May 10th 2025

Taking into account the latest results, the consensus forecast from Elanco Animal Health's eleven analysts is for revenues of US$4.54b in 2025. This reflects a satisfactory 2.4% improvement in revenue compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.038 per share in 2025. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$4.50b and losses of US$0.028 per share in 2025. While this year's revenue estimates held steady, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

View our latest analysis for Elanco Animal Health

As a result, there was no major change to the consensus price target of US$14.18, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Elanco Animal Health, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$10.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Elanco Animal Health's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 6.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Elanco Animal Health.

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The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Elanco Animal Health. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$14.18, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Elanco Animal Health. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Elanco Animal Health analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Elanco Animal Health has  3 warning signs  (and 2 which shouldn't be ignored)  we think you should know about.

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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.

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