Quantcast

Here's Why You Should Hold Onto Neogen (NEOG) Stock Now


Shutterstock photo

Neogen Corporation NEOG has been gaining investor confidence on solid business in international markets.

In the past three months, shares of this Zacks Rank #3 (Hold) company have rallied 11.2% versus the  industry 's 7.4% rise.

What's Favoring the Stock?

Food Safety Business Progresses: Neogen continues to see rising revenues from the Food Safety business owing to a growing population and awareness about higher-quality food among the middle class. Sales of foodborne pathogen detection tests like Listeria and Salmonella are also on the rise.

International Growth Continues : Neogen's Europe business, which has three divisions, is performing well. Last quarter, the company's Quat-Chem disinfectant division initiated production of its new Neogen Viroxide and the first shipment was sent to Germany, Egypt and the Czech Republic.Sales from Neogen in Brazil increased 40% year over year. The company is also upbeat about the prospects in China and India.

Genomic Business Grows : Neogen's worldwide animal genomics business unit recorded solid revenue increase in the fiscal third quarter.
Genomic revenues within the Food Safety business registered double-digit increase over the prior year on growth of laboratories in Scotland and Brazil. The business expanded well over the last few years as the company continued to add laboratory capabilities in Scotland to serve the growing European market and purchased Deoxi lab, a genomic laboratory, in Brazil.

What's Bothering It?

There are a few factors that have been marring the stock's prospects.

Tough Competitive Landscape : Neogen faces intense competition from from small businesses to divisions of large multinational companies. Some of these organizations have substantially greater financial resources than the company. The development of new technologies by competitors can affect the marketability and profitability of Neogen's products.


Global Economic Problems Dent Growth : The global macroeconomic environment has affected Neogen's operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare. This might build pressure on Neogen.

Which Way Are Estimates Moving?

For the fourth quarter of fiscal 2019, the Zacks Consensus Estimate for earnings is pegged at 28 cents, indicating 15.2% fall from the year-ago quarter. The consensus mark for revenues stands at $110.9 million, implying a 1.5% improvement from the year-earlier quarter.

Key Picks

A few better-ranked stocks in the broader medical space are Teleflex Inc. TFX , Penumbra PEN and NuVasive Corporation NUVA . While Teleflex currently carries a Zacks Rank #2 (Buy), the other two have a Zacks Rank #1 (Strong Buy). You can see  the complete list of today's Zacks #1 Rank stocks here .

Teleflex's long-term earnings growth rate is expected at 13.7%.

Penumbra's long-term earnings growth rate is projected at 21.5%.

NuVasive's long-term earnings growth rate is expected to be 11.9%.

Wall Street's Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.

Click for details >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Teleflex Incorporated (TFX): Free Stock Analysis Report

Penumbra, Inc. (PEN): Free Stock Analysis Report

Neogen Corporation (NEOG): Free Stock Analysis Report

NuVasive, Inc. (NUVA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: TFX , PEN , NEOG , NUVA



More from Zacks.com

Subscribe







Zacks.com
Contributor:

Zacks.com

Equity Research












Research Brokers before you trade

Want to trade FX?