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Wilmington, Massachusetts-based Charles River Laboratories International, Inc. (CRL) is a contract research organization. Valued at $12 billion by market cap, the company operates through Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions segments. CRL is expected to announce its Q2 earnings before the market opens on Wednesday, Aug. 7.
Ahead of the event, analysts expect Charles River to report a profit of $2.39 per share, down 11.2% from $2.69 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS projections over the past four quarters. CRL reported an EPS of $2.27 in Q1 2024, exceeding the consensus estimates by 10.7%.
In fiscal 2024, analysts expect Charles River to report an EPS of $10.99, up 3% from $10.67 in fiscal 2023. Looking forward to fiscal 2025, its EPS is expected to grow 12.4% year over year to $12.35.
CRL stock is down 1.5% on a YTD basis, underperforming the S&P 500 Index’s ($SPX) 14.8% gains and the S&P 500 Healthcare Sector SPDR’s (XLV) 9.7% returns over the same time frame.
Despite beating Q1 earnings estimates, Charles River Laboratories’ shares fell 2.2% on May 9 due to a 1.7% year-over-year revenue decline, driven by a significant drop in organic revenue in the Discovery and Safety Assessment segment and a notable drop in operating margins. Additionally, the company's 34.7% year-over-year drop in GAAP net income and concerns over restructuring costs further heightened investor concerns.
However, the company has reported increased net cash from operations compared to the year-ago quarter, exhibiting its cash-generating capabilities.The consensus opinion on Charles River stock is cautiously optimistic, with an overall “Moderate Buy” rating. Among 18 analysts covering the stock, nine recommend a “Strong Buy” rating, and nine suggest a “Hold” rating. The average target price for CRL is $249.48, indicating a potential upside of 6.9% from current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
