Analyst Note
| Rachel Elfman |Narrow-moat Catalent’s first-quarter fiscal-year 2023 results were negatively impacted by macroeconomic headwinds. Management dropped 2023 net revenue guidance by 7% at the midpoint, decreased adjusted net income guidance by 13%, and lowered adjusted EBITDA guidance by 7%. The declines are attributed to changes in market conditions, negative outlook received from some of their customers (cash-sensitive decisions from customers related to inventory levels), inflation, foreign exchange headwinds, and supply chain pressures. We have adjusted our model to account for these headwinds, and we have lowered our fair value estimate to $82 per share from $98. We maintain our narrow moat, stable trend, and medium uncertainty rating for Catalent.