Charles River Laboratories falls as Jefferies downgrades on demand concerns

Medpace Holdings

25/04/2022 17:29

** Shares of Charles River Laboratories  CRL.N  down 7.6% at
$252.42 after Jefferies downgrades to "hold" from "buy" on
concerns over biotech funding and slashes PT to Street low of
$280
    ** CRL among biggest pct losers on S&P 500 index  .SPX ,
which is down 1.5%
    ** Shares of contract research organizations (CROs) have
taken a hit after Medpace Holdings  MEDP.O  in mid-Feb flagged a
decline in biotech funding, triggering concerns about weakening
client demand for CROs  urn:newsml:reuters.com:*:nL4N2V34N4
    ** CRL, which has forecast 2022 adj EPS of $11.50–$11.75,
said in February it is in a "strong position" for growth even if
the funding environment moderates a bit 
    ** Jefferies says its check-ins with private CROs suggest
demand for CRO services has softened in Q2; also says there is
added risk from increasing restructuring announcements from
biotech firms 
    ** Says CRL's 2022 forecast requires "a very steep ramp" in
the face of likely slowing client demand
    ** CRL shares down 33% YTD

 (Reporting by Amruta Khandekar)
 ((Amruta.Khandekar@thomsonreuters.com;))