Neogen (NEOG) Cut to Sell at Zacks Investment Research

Neogen (NASDAQ:NEOG) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report released on Wednesday.

According to Zacks, “Neogen has been grappling with pricing pressure and supply challenges in the animal protein sector, majorly in China and Mexico. Tough competition also weighs on the stock. Escalating expenses put pressure on margins. Moreover, valuation looks stretched at this moment. On a positive note, Neogen continues to report robust revenue performance banking on balanced growth across all segments. The company is currently progressing well with the integration process related to several new acquisitions within its genomics business including recent purchase of laboratories in Brazil and Australia. Internationally, Neogen is expanding its business quite rapidly. The company witnessed growing revenues in Europe, Brazil, Mexico, China and India along with other geographies in the reported quarter. It has established a laboratory in Shanghai, China. Overall, year to date, shares of Neogen outperformed its industry.”

A number of other equities analysts also recently commented on NEOG. BidaskClub upgraded Neogen from a “sell” rating to a “hold” rating in a research note on Tuesday, November 13th. ValuEngine downgraded Neogen from a “strong-buy” rating to a “buy” rating in a research note on Wednesday, September 26th. Two equities research analysts have rated the stock with a sell rating, three have issued a hold rating and one has given a buy rating to the company. The stock currently has an average rating of “Hold” and an average target price of $67.75.

NASDAQ:NEOG opened at $62.00 on Wednesday. The stock has a market capitalization of $3.20 billion, a P/E ratio of 51.24 and a beta of 1.38. Neogen has a one year low of $54.09 and a one year high of $97.38.

Neogen (NASDAQ:NEOG) last posted its quarterly earnings results on Tuesday, September 25th. The company reported $0.29 EPS for the quarter, topping the Zacks’ consensus estimate of $0.28 by $0.01. The business had revenue of $99.60 million during the quarter, compared to the consensus estimate of $104.43 million. Neogen had a return on equity of 12.06% and a net margin of 16.35%. The company’s revenue for the quarter was up 5.7% compared to the same quarter last year. During the same period last year, the firm earned $0.31 earnings per share. Analysts anticipate that Neogen will post 1.24 EPS for the current fiscal year.

Neogen declared that its Board of Directors has approved a share buyback plan on Wednesday, October 10th that authorizes the company to repurchase 3,000,000 shares. This repurchase authorization authorizes the company to purchase shares of its stock through open market purchases. Stock repurchase plans are typically an indication that the company’s leadership believes its stock is undervalued.

In other Neogen news, CEO John Edward Adent purchased 4,300 shares of the business’s stock in a transaction dated Wednesday, September 26th. The shares were bought at an average price of $73.58 per share, with a total value of $316,394.00. Following the completion of the acquisition, the chief executive officer now owns 4,300 shares in the company, valued at approximately $316,394. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Chairman James L. Herbert sold 2,748 shares of Neogen stock in a transaction that occurred on Friday, November 23rd. The shares were sold at an average price of $60.51, for a total value of $166,281.48. Following the sale, the chairman now directly owns 742,576 shares in the company, valued at approximately $44,933,273.76. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 72,851 shares of company stock valued at $4,482,628. 3.00% of the stock is currently owned by insiders.

Several institutional investors and hedge funds have recently added to or reduced their stakes in NEOG. Tower Research Capital LLC TRC bought a new stake in shares of Neogen during the second quarter valued at approximately $106,000. Point72 Hong Kong Ltd bought a new stake in shares of Neogen during the third quarter valued at approximately $120,000. Jefferies Group LLC bought a new stake in shares of Neogen during the third quarter valued at approximately $201,000. Gideon Capital Advisors Inc. bought a new stake in shares of Neogen during the third quarter valued at approximately $231,000. Finally, Acadian Asset Management LLC bought a new stake in shares of Neogen during the third quarter valued at approximately $275,000. 89.53% of the stock is currently owned by institutional investors.

Neogen Company Profile

Neogen Corporation, together with its subsidiaries, develops, manufactures, and markets various products for food and animal safety worldwide. It operates through two segments, Food Safety and Animal Safety. The Food Safety segment primarily offers diagnostic test kits and complementary to detect dangerous and/or unintended substances in human food and animal feed, such as foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues, and general sanitation concerns; and AccuPoint Advanced rapid sanitation test for adenosine triphosphate, a chemical found in living cells.

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