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On Thursday, Deutsche Bank (ETR:DBKGn) analyst Justin Bowers increased the price target for Charles River Laboratories International Inc. (NYSE:CRL) shares, setting it at $180, up from the previous $140, while reiterating a Buy rating on the stock. The stock has shown strong momentum recently, posting a remarkable 17% gain in the past week, with shares currently trading at $137. The adjustment follows Charles River’s consistent performance, having surpassed consensus earnings per share (EPS) predictions by an average of 8% over the past three quarters. The company has also provided positive forward guidance revisions after its second-quarter guidance reset in 2024. According to InvestingPro data, net income is expected to grow this year, supporting the positive outlook.
Bowers highlighted Charles River’s strategic moves to realign its cost structure with the current market conditions and to enhance operational efficiencies. These efforts are expected to result in higher incremental gains once the end-market sees a more significant recovery. The company maintains a healthy financial position with a current ratio of 1.41 and an Altman Z-Score of 3.09, indicating strong financial stability. Furthermore, the company has revealed new information regarding its future economic prospects that Bowers finds encouraging: the Non-Animal Model (NAM) business is larger than previously estimated, and the annualized revenue from long-duration, chronic non-human primate monoclonal antibodies (mAbs) is less than initially thought.
The analyst believes that the shift towards a broader adoption of NAMs by drug developers will progress steadily. As a result, Deutsche Bank has raised its earnings estimates for Charles River for the years 2026-2027 to reflect this updated perspective. The company’s proactive approach to forecasting and its ability to adjust to the evolving landscape have contributed to the analyst’s positive outlook.
Charles River Laboratories has been actively working to position itself favorably for when the market conditions improve. The company’s recent disclosures and strategic adjustments have provided a clearer picture of its business scale and revenue sources, which has led to a more optimistic assessment by Deutsche Bank. The new price target of $180 reflects the firm’s confidence in Charles River’s growth trajectory and its potential for continued success in the biotechnology and pharmaceutical services industry. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which covers over 1,400 US stocks. Subscribers can access 10 additional ProTips and detailed financial metrics for smarter investment decisions.
In other recent news, Charles River Laboratories International, Inc. reported its first-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.34, compared to the forecasted $2.09. The company also achieved a revenue of $984.2 million, exceeding the anticipated $941.47 million, despite a 2.7% year-over-year decline. Following these results, the company raised its full-year guidance, projecting an EPS of $9.30 to $9.80. In addition to these financial results, Charles River Laboratories launched the Alternative Methods Advancement Project, which is expected to contribute $200 million in annual revenue. Analyst firm Evercore ISI upgraded the company’s stock rating from In Line to Outperform, raising the price target to $170.00 from $135.00, following the company’s earnings release and a cooperation agreement with Elliott Management. The agreement with Elliott, an activist investment firm, is perceived as a catalyst for enhancing shareholder value through strategic initiatives. Despite potential challenges from NIH and FDA funding cuts, the company’s strategic investments and innovative projects position it as a leader in preclinical drug development.
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