2023-04-17 11:21:13 ET
- Catalent ( NYSE: CTLT ) shares bounced back Monday while Baird downgraded the contract manufacturer despite an over 25% selloff in the previous session in reaction to the departure of CFO Ricky Hopson and financial warnings over impact from operational challenges.
- Slashing his FY24 projection for the company's EBITDA by 15%, the analyst Evan Stover downgrades the stock to Neutral from Outperform and cuts its price target to $53 from $82 per share.
- The operational challenges have prompted the analyst to lower his expectations for Catalent ( CTLT ) in 2024 and the LRP. "It was an ill-timed move last summer to increase revenue LRP from +8%-10% to +8%-12%," Stover added.
- Noting that CTLT is trading at ~11x on FY24E EBITDA, the analyst wrote: "but we are low confidence in the EBITDA and would need a bigger margin of safety to stay Outperform on takeout potential alone."
- Wall Street has remained bullish on CTLT stock, with an average rating of Buy from analysts , while Seeking Alpha's Quant System, which consistently beats the market, rated CTLT as a Hold.
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Catalent downgraded at Baird after operational challenges