UPDATE: Goldman Sachs Downgrades Charles River Laboratories on RMS Guidance Risk

In a report published Tuesday, Goldman Sachs analyst Robert P. Jones downgraded the rating on Charles River Laboratories CRL from Neutral to Sell, and lowered the price target from $44.00 to $38.00.

In the report, Goldman Sachs noted, “We downgrade CRL to Sell as we see risk to guidance for RMS (Research Models) constant currency growth of 4%-6% and see little upside to PCS (Preclinical Services). We see 12% downside to our new $38, 12-month price target vs. 4% downside for our CRO coverage. On PCS, recent results and channel checks indicate still subdued early-stage spend and excess capacity as pharma prioritizes late-stage pipelines. For RMS, we estimate (excluding recent acquisitions) sales declined by 2.5% on a constant currency basis, suggesting flat volume growth. All in, we await a broader rebound in Preclinical demand and downgrade CRL as we see little valuation support.”

Charles River Laboratories closed on Monday at $43.21.