CRL
Charles River Laboratories International Inc.
Healthcare
06/02/2020
Presented
| Date | 05/29/2020 |
| Price | $179.66 |
| Market Cap | $8.89B |
| Ent Value | $8.49B |
| P/E Ratio | 36.13x |
| Book Value | $33.38 |
| Div Yield | 0% |
| Shares O/S | 49.49M |
| Ave Daily Vol | 469,504 |
| Short Int | 2.54% |
Current
| Price | $193.87 |
| Market Cap | $10.01B |
| Charles River Laboratories International, Inc. is an early-stage contract research company, which provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and academic institutions. It operates through the following segments: Research Models & Services, Discovery & Safety Assessment and Manufacturing Support. The Research Models & Services segment comprises of the production and sale of research models, and also offers services designed to support its client's use of research models in screening non-clinical drug candidates. The Discovery & Safety Assessment segment offers discovery and safety assessment services, both regulated and non-regulated, in which it include both in vivo and in vitro studies, supporting laboratory services, and strategic preclinical consulting and program management to support product development. The Manufacturing Support segment provides endotoxin and microbial detection, avian vaccine and biologics testing solutions. The company was founded by Henry L. Foster in 1947 and is headquartered in Wilmington, MA. |
Publicly traded companies mentioned herein: Charles River Laboratories International Inc (CRL)
Highlights
The presenter is long shares of Charles River Laboratories (CRL) and believes that his assessment of the setup is somewhat unique, having approached the analysis from a med-tech perspective. In his opinion, CRL is attractive on a bottoms-up and top-down basis and has underappreciated earnings power (driven by a margin tailwind); the combination of positive attributes should drive outperformance relative to Street expectations over the next 12 - 24 months. The stock has fully recovered from its COVID-19-induced selloff, which was unwarranted given CRL’s focus on preclinical and clinical R&D, as well as non-clinical services. If anything, it was argued that CRL will likely benefit from the flurry of vaccine development efforts presently underway. Regardless, at $179, the stock trades at ~26x 2020 Street EPS estimates (~22x the consensus ‘21 EPS forecast), and holding those multiples constant will yield a meaningfully higher stock price based on the presenter’s earnings forecasts: $8/share this year and $9.90/share in 2021. Applying a 25x forward multiple to EPS, which is fair in his opinion, yields a $250 price target within 12 months.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.