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Charles River Laboratories International Inc CRL

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Morningstar’s Analysis

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Charles River Reports Strong Q2 Results Due to Robust Client Demand; Raising FVE to $225

Rachel Elfman Equity Analyst

Analyst Note

| Rachel Elfman |

Charles River reported stronger-than-expected second-quarter revenue of nearly $915 million, representing an increase of 34% from the prior-year period. GAAP net income was $88.4 million for the quarter, an increase of 31% from second-quarter 2020. Due to robust industry demand across Charles River’s segments, management has increased its guidance for 2021. We’ve raised our fair value estimate to $225 per share from $170 due to a stronger outlook for the year thanks to healthy client demand and a more positive impact from the acquisitions of Cognate BioServices and Vigene Biosciences. We maintain our narrow moat rating, which is based on the intangible assets and switching costs associated with Charles River’s leading research models and related services, including discovery and safety assessment.

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Company Profile

Business Description

Charles River Laboratories was founded in 1947 and is a leading provider of drug discovery and development services. The company's research model & services segment is the leading provider of animal models for laboratory testing, which breeds and delivers animal research models with specific genetic characteristics for preclinical studies around the world. The discovery & safety assessment segment includes services required to take a drug through the early development process, including discovery services. The manufacturing support segment includes microbial solutions, which provides in vitro (non-animal) testing products, biologics testing services, and avian vaccine services.

251 Ballardvale Street
Wilmington, MA, 01887
T +1 781 222-6000
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 18,400