/Charles%20River%20Laboratories%20International%20Inc_%20logo-%20by%20IgorGolovniov%20via%20Shutterstock.jpg)
With a market cap of $9.4 billion, Wilmington, Massachusetts-based Charles River Laboratories International, Inc. (CRL) is a leading contract research organization (CRO) in the healthcare sector. It offers a wide range of services, including research models, safety assessments, and manufacturing support to facilitate drug development for pharmaceutical and biotechnology clients globally. CRL is expected to release its fiscal Q3 earnings results before the market opens on Wednesday, Nov. 6.
Ahead of this event, analysts expect the contract drug developer to report a profit of $2.43 per share, down 10.7% from $2.72 per share in the year-ago quarter. However, the company has surpassed Wall Street's bottom-line estimates in the last four quarters. CRL exceeded the consensus EPS estimate by 17.2% in the most recent quarter.
For fiscal 2024, analysts expect CRL to report EPS of $10.01, down 6.2% from $10.67 in fiscal 2023. However, its EPS is projected to rebound with a growth of 5.3% year-over-year, reaching $10.54 in fiscal 2025.
Charles River Laboratories has risen 5.5% over the past 52 weeks, underperforming the S&P 500 Index's ($SPX) 38.7% return and the Health Care Select Sector SPDR Fund's (XLV) 17.5% increase over the same period.
Despite reporting better-than-expected Q2 adjusted EPS of $2.80, shares of Charles River Laboratories dropped 12.6% on Aug. 7, primarily due to a 3.2% revenue decline to $1.03 billion. The company also reported a significant decrease in GAAP operating margin from 15.6% to 14.8%, largely due to lower revenue in the Discovery and Safety Assessment (DSA) and Research Models and Services (RMS) segments. Furthermore, CRL revised its 2024 guidance downward due to continued demand weakness from small and mid-sized biotechnology clients, further alarming investors about its near-term growth.
Overall, analysts' consensus view on Charles River Laboratories stock is cautious, with a "Hold" rating. Out of 17 analysts covering the stock, five recommend a "Strong Buy," 10 suggest a "Hold," and the remaining two give a "Strong Sell" rating. This configuration is less bullish than three months ago, with nine “Strong Buy” ratings on the stock. As of writing, CRL is trading below the average analyst price target of $206.67.
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.
