Goldman Sachs downgrades Charles River Labs
NEW YORK (AP) — A Goldman Sachs analyst downgraded shares of Charles River Laboratories International Inc. on Tuesday, saying the medical researcher may struggle to meet its guidance in 2013.
THE OPINION: Analyst Robert Jones lowered his rating to "Sell" from "Neutral" and cut his price target to $38 from $44. Jones said Charles River Labs' research models business may not live up to the company's expectations because business has slowed and the company has made only small price increases.
The Wilmington, Mass., company earned 69 cents per share in its fiscal first quarter, excluding one-time items, while revenue grew 2 percent to $291.2 million. Both were slightly below Wall Street estimates. Its research model revenue slipped less than 1 percent, to $182.5 million. Preclinical services revenue grew 6 percent to $108.7 million. Jones doesn't expect a strong rebound in that division, however.
The company expects to earn between $2.80 and $2.90 per share in 2013, and it forecasts revenue growth of 3 to 5 percent — about $1.16 billion to $1.19 billion.
Jones cut his outlook for the year, but it remains in line with the company's view. He now predicts earnings of $2.80 per share on revenue of $1.17 billion. Wall Street analysts have similar estimates, on average.
THE STOCK: Shares of Charles River Labs fell 65 cents to $42.56 in afternoon trading. The company's shares have gained 15 percent in 2013. Jones' price target implies a decline of 12 percent from Monday's close.