Jefferies Reiterates a Hold Rating on Catalent

By Ryan Adsit

In a report released yesterday, David Windley from Jefferies reiterated a Hold rating on Catalent (NYSE: CTLT), with a price target of $28. The company’s shares closed yesterday at $22.88.

Windley observed:

“A modest downward organic guide and increased backend loaded EBITDA will likely weigh on CTLT Tuesday. CTLT performed slightly ahead of consensus and in line with internal expectations. FY16 issues have started to subside and the business appears on track to meet guidance. The shifts in guidance do serve as a reminder of the inherent quarterly volatility risk. Guidance Unchanged in Total, Moving Parts Net. Management maintained its FY17 outlook acknowledging that a significant portion of revenue and profits come in 4Q, and the year is too young to have clear visibility. Guidance does have new inputs, though. The PharmaTek acquisition, which closed at quarter’s end, adds 1-2% to annualized revenue and EBITDA. That increase is offset by FX headwinds on GBP weakness. Management shifted 2% of EBITDA from 1H to 2H (was 40/60, now 38/62).”

According to TipRanks.com, Windley is a top 100 analyst with an average return of 14.6% and a 69.0% success rate. Windley covers the Healthcare sector, focusing on stocks such as Quintiles Transnational, WellCare Health Plans, and Charles River Labs .

Catalent has an analyst consensus of Moderate Buy, with a price target consensus of $28.

Catalent’s market cap is currently $2.85B and has a P/E ratio of 26.92. The company has a book value ratio of 4.4872.

Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is negative on the stock. Most recently, in September 2016, Blackstone Management Associates V L.L.C., a Major Shareholder at CTLT sold 17,100,705 shares for a total of $403,234,624.

Catalent, Inc. is a holding company, which engages in the research, development and marketing of pharmaceutical products. It operates through the following segments: Softgel Technologies, Drug Delivery Solutions, and Clinical Supply Services. The Softgel Technologies segment engages in formulation, development and manufacturing of prescription and consumer health soft capsules, or softgels including traditional softgel capsules; and vegicaps and optishell capsules. The Drug Delivery Solutions segment includes formulation, development and manufacturing of prescription and consumer and animal health products using its proprietary optimelt, optipact, optiform and zydis technologies, other proprietary and conventional drug delivery technologies such as prefilled syringes; blow-fill seal unit dose manufacturing including its ADVASEPT technology; biologic cell line development including its GPEx and SMARTag technologies; and analytical and bioanalytical development; and testing services. The Clinical Supply Services segment includes in manufacturing, packaging, labeling, storage, distribution and inventory management for global clinical trials of drugs and biologics for customer required patient kits; fastChain demand-led clinical supply service; clinical e-solutions and informatics; and global comparator sourcing services. The company was founded in April 2007 and is headquartered in Somerset, NJ.