2023-05-12 15:03:55 ET
Shares of contract manufacturer Catalent ( NYSE: CTLT ) continued to tumble on Friday to reach a new 52-week low, while Jefferies reaffirmed its Buy rating despite the company’s recent decisions to lower guidance and delay Q3 financials.
Catalent ( CTLT ) has lost more than half of its value this quarter as Wall Street reacted to its issues ranging from the exit of the finance chief, financial warnings, and a decision to delay the quarterly report on Thursday.
“…With investor expectations resetting, we think CTLT has upside from current levels, particularly if SRP-9001 is approved in May and management can boost productivity levels,” Jefferies analyst David Windley wrote, referring to a gene therapy currently under FDA review.
The developer Sarepta Therapeutics ( SRPT ) has partnered with Catalent ( CTLT ) for SRP-9001, the approvability of which is currently being discussed at an FDA AdCom meeting ahead of a final decision later this month.
As for the delay in financials, CTLT noted that certain unresolved non-cash adjustments related to its operations in Bloomington, Ind. required additional time for review as the company was evaluating their impact on prior financials.
Jefferies’ Windley argues that the issue is less critical to the guidance cut than the operational and forecasting challenges CTLT had previously cited.
However, slashing his price target on CTLT to $45 from $83, the analyst cited a risk of restatement and argued that “restated revenues may not be recoverable within a couple quarters (or at all).”
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Catalent hits new 52-week low; Jefferies defends