US stock futures fall ahead of key PCE inflation data
Investing.com - William Blair downgraded Neogen (NASDAQ:NEOG) from Outperform to Market Perform on Tuesday, citing concerns about the company’s growth prospects amid challenging macroeconomic conditions. The stock, currently trading at $4.83, has experienced significant volatility, falling over 50% in the past six months. According to InvestingPro analysis, Neogen appears undervalued at current levels.
The downgrade follows Neogen’s fiscal fourth-quarter update, which included fiscal 2026 revenue guidance suggesting flat to declining revenues when excluding the company’s recently divested disinfectant business.
William Blair noted that one of its core bullish arguments for Neogen had been the potential for profitability growth as increasing volumes would deliver high incremental margins, but this thesis has been challenged by the worsening macro environment.
The research firm expressed concern about several factors that could continue to pressure Neogen’s markets, including recent upticks in food CPI, cuts to SNAP benefits in the recent tax bill, and the current administration’s focus on reducing regulation and costs.
While acknowledging that Neogen operates in a historically macro-resilient market, William Blair indicated it is difficult to envision a scenario where macroeconomic conditions improve sufficiently to overcome these headwinds, leading to the firm’s more cautious stance on the stock.
In other recent news, Neogen Corporation reported its fourth-quarter 2025 earnings, delivering results that exceeded analysts’ expectations. The company posted an earnings per share (EPS) of $0.05, outperforming the forecasted -$0.03. Revenue figures also came in strong, reaching $225.5 million, which surpassed the anticipated $221.92 million. Despite these positive earnings and revenue results, Neogen’s stock experienced a decline in premarket trading. This suggests that investors may have concerns beyond the reported financial performance. These developments highlight the importance of closely monitoring Neogen’s future announcements and market reactions.
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