Citi upgraded Charles River Laboratories (NYSE:CRL) and LabCorp (NYSE:LH) while downgrading Quest Diagnostics (NYSE:DGX), citing valuation-related arguments as the main reasons for the rating revisions.
Analyst Patrick Donnelly upgraded contract research organization Charles River (NYSE:CRL) to Neutral from Buy, noting that his negative thesis for the company has largely played out and the stock adequately reflects his concerns.
However, he raised his price target on CRL to $175 from $155 per share, noting that “we think the recent DSA (and manufacturing) revenue and margin headwinds are appropriately modeled by the Street and adequately reflected in valuation.”
Meanwhile, Donnelly upgraded Labcorp (NYSE:LH) to Buy from Neutral and raised its price target to $300 from $250. The analyst argued that the stock’s multiple has yet to fully reflect the improvements in utilization and recovery in early development.
Donnelly downgraded Quest Diagnostics (NYSE:DGX) to Neutral from Buy but maintained his price target at $185 per share. “Our positive thesis has largely played out with the core diagnostics business and elevated utilization rates fully appreciated in the multiple, leaving limited room for potential upside,” Bloomberg reported, quoting the analyst.
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