2023-05-22 09:56:53 ET
Despite an over 15% rise in the previous session, Catalent ( NYSE: CTLT ) shares traded flat on Monday after JPMorgan downgraded the contract manufacturer to Neutral, citing a lack of clarity in its near-term outlook.
The downgrade comes after the Somerset, New Jersey-based company announced a delay for its Q3 FY23 report for the fourth time late last week and decided to lower the full-year guidance amid operational challenges at some of its manufacturing sites.
"Although the lowered guidance could provide a floor with inflection in FY24, the customer perception and morale could negatively impact the project pipeline," JPMorgan analyst Julia Qin wrote, downgrading the stock to Neutral from Overweight.
While highlighting the company's long-term potential, Qin, who halves CTLT's price target to $45, also points to the risk of accounting restatement and the impact of ongoing financial reviews, issues Catalent ( CTLT ) recently disclosed.
In addition to productivity problems and delay in Q3 filing, Qin argues that macro headwinds and weakness in the company's Pharma and Consumer Health segment also cloud its near-term outlook.
More on Catalent
- Catalent delays Q3 earnings release, conference call for third time
- Catalent: How Concerned Should One Be?
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Catalent cut to Neutral at JPMorgan on near-term outlook