Why Elanco Animal Health Incorporated (ELAN) Went Down on Tuesday

We recently compiled a list of the 10 Stocks Battered by Bearish Outlooks. In this article, we are going to take a look at where Elanco Animal Health Incorporated (NYSE:ELAN) stands against the other stocks.

Ten firms ended Tuesday suffering a sell-off, as investor sentiment continues to be dampened by macroeconomic uncertainties and bearish outlooks from analysts and their management.

The stocks–three of which belong to the travel and tourism industry–registered losses following lower outlook guidance, taking into account the potential effects of President Donald Trump’s trade war with other countries.

The pessimistic sentiment mirrored the broader market decline, with the Dow Jones slashing another 1.14 percent during the day, the S&P dropping 0.76 percent, and the Nasdaq dipping 0.18 percent.

To come up with the list, we considered only the stocks with at least $2 billion in market capitalization and $5 million in trading volume.

A farmer tending to a herd of cattle with Innovative Parasiticide and Vaccine Products.

Elanco Animal Health Incorporated (NYSE:ELAN)

Elanco Animal Health Incorporated (NYSE:ELAN) dropped its share prices by 7.04 percent on Tuesday to end at $10.04 apiece following news that it was being investigated by shareholder law firms for potential securities violations.

In separate statements, the shareholder law firms announced they had initiated their own investigations against Elanco Animal Health Incorporated (NYSE:ELAN) for allegedly issuing materially false and misleading statements regarding its business, operations, and prospects.

A class action lawsuit has already been filed against the company claiming that Elanco Animal Health Incorporated (NYSE:ELAN) failed to disclose that its Zenrelia drug was less safe that it led investors to believe, it was unlikely to meet the timeline for the US approval and commercial launch for its Zenrelia and Credelio Quattro treatments, and that its financial prospects were overstated.

Elanco Animal Health Incorporated (NYSE:ELAN) has yet to issue a statement on the allegations.

Overall ELAN ranks 6th on our list of Tuesday’s worst performers. While we acknowledge the potential of ELAN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELAN but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.