UBS analyst Daniel Brennan upgraded Catalent to Buy and raised his price target to $54 from $43, saying the company’s acquisition of Paragon “significantly increases the exposure to the rapidly growing biologic production market” which he sees as “arguably the most attractive sub segment within the broader life science tools sector today.” The analyst models the deal to be accretive by over 200bps to Catalent’s revenue and EBITDA in the long term and potentially higher in the near term, adding that his price target assumes EBITDA multiple of 14-times – a 2-turn premium to the stock’s long-term average. Brennan further notes that his “recent diligence” suggests that the “bullishness about the gene therapy market is warranted.”
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