Elanco Shares Poised For Upside After Another Quarter Of Outperformance

Elanco Animal Health Incorporated (NYSE:ELAN) reported third-quarter 2025 results on Wednesday, posting adjusted earnings per share of 19 cents, up 46% year over year.

Earnings exceeded both the company's guidance range of 12-16 cents and the consensus estimate of 13 cents.

Revenue came in at $1.14 billion, surpassing the consensus estimate of $1.09 billion and exceeding management's guidance of $1.08 billion to $1.11 billion.

Sales grew 10% on a reported basis and 9% on an organic, constant-currency basis.

Also Read: Elanco Animal Health Gets Its Bite Back, Pipeline Efforts Earn Praise

Adjusted EBITDA was $198 million, a 21% decrease.

Pet Health revenue was $533 million, an increase of 10% on a reported basis and 8% on an organic, constant-currency basis, driven by new products, including Credelio Quattro and Zenrelia.

Farm Animal revenue was $593 million, up 12% (+10% at constant currency).

Third-quarter volumes were up 9%, driven by increased volumes across cattle and poultry, led by Experior in U.S. cattle and by strength in poultry sales globally.

Adjusted gross profit was $601 million and gross margin was 53.1% in the third quarter of 2025, a 90 basis point increase, primarily driven by the favorable productivity benefits from increased sales volumes.

Full-Year Guidance

Elanco anticipates a tailwind to revenue of approximately $30 million from the favorable impact of foreign exchange rates.

The company raised fiscal 2025 revenue guidance from $4.57 billion-$4.62 billion to $4.65 billion-$4.67 billion versus the consensus of $4.603 billion.

Elanco also increased its 2025 adjusted EPS from 85-91 cents to 91-94 cents, versus the consensus of 90 cents.

Eanco now expects an adjusted gross margin of 54.9% to 55.2%

Full-year adjusted EBITDA includes a current estimate for net tariff impact of $10 to $14 million.

Fourth-Quarter Guidance

Elanco expects a tailwind of approximately $10 million to revenue from the favorable impact of foreign exchange rates.

Elanco forecasts fourth-quarter adjusted earnings of 9-12 cents per share versus the consensus of 14 cents, with sales of $1.085 billion-$1.11 billion compared to the Wall Street estimate of $1.078 billion.

William Blair wrote, “The quarter shows the benefits of a broad portfolio of new products gaining momentum, supporting another quarter of upside to sales and profitability, coupled with increased guidance and deleveraging of the balance sheet—all of which are key tenets of the bullish thesis from here.”

Analyst Brandon Vazquez maintains the Outperform rating and thinks an improving P&L statement into 2026 will support continued share upside.

Price Action: ELAN stock is up 0.04% at $22.51 during the premarket session at the last check on Wednesday.

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