Market Overview

Pharma Supplier Charles River Laboratories Has Leading Competitive Position, Raymond James Says In Upgrade

Share:
Pharma Supplier Charles River Laboratories Has Leading Competitive Position, Raymond James Says In Upgrade

Charles River Laboratories Intl. Inc (NYSE: CRL), a provider of products and services to pharmaceutical companies, is a market share leader that's well-positioned for expansion, according to Raymond James.

The Analyst

Analyst Michael Baker upgraded Charles River Laboratories from Market Perform to Outperform with a new $140 price target.

The Thesis

Charles River has a leading competitive position, with a product line unrivaled by peers, Baker said in the upgrade note. (See his track record here.) 

This puts the company in a position of pricing power at a time when its products and services are becoming increasingly vital as part of the drug development process, the analyst said.

Charles River diversified its business away from more mature markets toward higher-growth segments with larger addressable markets, Baker said. The company operates in a mostly fragmented market, which implies that potential exists for more "robust" M&A opportunities, he said.

Future accretive M& deals that add new capabilities and market share opportunities for Charles River should be sufficient to lift the stock price, the analyst said. 

The stock is trading at 19 times Raymond James' 2019 EPS estimate, which is near the midpoint of its two-year historical forward P/E range of 15 to 22 times.

The analyst's $140 price target implies a 22 times multiple, which Baker said is justified by a strong biotech funding backdrop, future market share gains and an attractive potential M&A pipeline.

Price Action

Charles River shares were rising 2.36 percent to $123.41 at the time of publication Thursday.

Related Links:

Charles River Laboratories Is A Leader In Biopharma Outsourcing, KeyBanc Says In Upgrade

Jefferies Highlights A Pair Trade In Pharma: Buy ICON, Hold Tight On INC Research

Latest Ratings for CRL

DateFirmActionFromTo
Sep 2020Argus ResearchMaintainsBuy
Sep 2020JefferiesUpgradesHoldBuy
Aug 2020KeyBancMaintainsOverweight

View More Analyst Ratings for CRL
View the Latest Analyst Ratings

 

Related Articles (CRL)

View Comments and Join the Discussion!

Posted-In: Michael BakerAnalyst Color Biotech Upgrades Health Care Price Target Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
MSFTStifelMaintains245.0
TXRHJP MorganMaintains67.0
SBUXJP MorganMaintains82.0
MCDJP MorganMaintains220.0
CMGJP MorganMaintains1,115.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com