Analysis of the Reasons Why William Blair Maintains a "Market Perform" Rating on Neogen

William Blair investment bank analyst Brandon Vazquez downgraded Neogen Corporation (NASDAQ: NEOG) from an “Outperform” rating to “Market Perform” on July 29, 2025 [1]. Despite the company’s Q2 FY2026 results exceeding market expectations, William Blair has maintained this rating [2].

William Blair analysts clearly stated that Neogen’s stock is currently trading at

[2][3]. This means the market has already priced in the company’s improvement prospects, and further upside requires more fundamental improvements to support it.

Analysts emphasized that the key consideration for maintaining the rating lies in the

[2]. While the new leadership has indeed brought positive changes, the sustainability of these improvements still requires time to be verified.

The

, including structural challenges such as declining food production output, cost increases driven by inflationary pressures, as well as plant closures and corporate bankruptcies in the industry [2][4]. These factors may pressure the company’s future growth.

Despite the unchanged rating, William Blair acknowledged that Neogen’s Q2 results showed

:

Metric	Q2 FY2026 Performance	Market Reaction
Adjusted EPS	$0.10 (vs. consensus $0.06) [2]	67% above expectations
Core Revenue Growth	+2.9% [2]	First positive growth in four quarters
Adjusted EBITDA Margin	21.7%, up 470 bps QoQ [2]	Significant improvement
Gross Margin	47.5%, up 210 bps QoQ [2]	Continuous improvement

According to William Blair’s analytical framework, the following factors could serve as catalysts for a future rating upgrade:

• Achieve
  sustainable revenue growth
  for multiple consecutive quarters
• Confirmation of a
  sustained improvement trend
  in profitability metrics

• Completion of the
  Petrifilm product line integration
  as scheduled by 2027 [2]
• Continuous optimization of production efficiency for the
  sample collection product line
  , which is expected to become a profit contributor in H2 FY2026 [2]
• Successful implementation of the
  solution-based sales model
  to enhance customer stickiness and wallet share

• Sustained
  $20 million annualized savings
  from cost-cutting measures [2]
• Completion of inventory management optimization, with scrap and obsolescence levels returning to normal
• Release of operational leverage

• Recovery of growth in food production industry output
• Improvement in the cost environment as inflationary pressures ease

William Blair’s assessment of Neogen reflects a

stance. Analysts acknowledged that driven by the new leadership, the company has indeed demonstrated an “” [2], but given the early stage of the turnaround and the current valuation level, they chose to maintain the “Market Perform” rating, awaiting more substantial evidence of improvement.

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[1] Benzinga - “Neogen Gears Up For Q2 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts” (January 2026) https://www.benzinga.com/analyst-stock-ratings/price-target/26/01/49745932/neogen-gears-up-for-q2-print-here-are-the-recent-forecast-changes-from-wall-streets-most-accurate-analysts

[2] Finviz - “Neogen’s Raised Outlook Fuels Turnaround Hopes, Stock Soars” (January 2026) https://finviz.com/news/271179/neogens-raised-outlook-fuels-turnaround-hopes-stock-soars

[3] Bitget - “Neogen’s Upgraded Forecast Sparks Optimism for Recovery, Shares Surge” (January 2026) https://www.bitget.com/news/detail/12560605137641

[4] Yahoo Finance - “Neogen Corporation (NEOG) Q2 FY2026 earnings call transcript” (January 2026) https://finance.yahoo.com/quote/NEOG/earnings/NEOG-Q2-2026-earnings_call-396315.html