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Analyst Estimates: Here's What Brokers Think Of Neogen Corporation (NASDAQ:NEOG) After Its Full-Year Report

Simply Wall St
·4 mins read

Shareholders might have noticed that Neogen Corporation (NASDAQ:NEOG) filed its yearly result this time last week. The early response was not positive, with shares down 3.5% to US$75.32 in the past week. It was a credible result overall, with revenues of US$418m and statutory earnings per share of US$1.13 both in line with analyst estimates, showing that Neogen is executing in line with expectations. 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.

See our latest analysis for Neogen

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earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Neogen's four analysts is for revenues of US$447.8m in 2021, which would reflect a reasonable 7.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to ascend 10% to US$1.24. Before this earnings report, the analysts had been forecasting revenues of US$451.3m and earnings per share (EPS) of US$1.22 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$81.00. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Neogen, with the most bullish analyst valuing it at US$88.00 and the most bearish at US$75.00 per share. This is a very narrow spread of estimates, implying either that Neogen is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 7.1%, in line with its 8.0% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 9.8% next year. So although Neogen is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Neogen going out to 2022, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Neogen that you need to be mindful of.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.