Charles River Earnings: Near-Term Macro Headwinds Have Impact on Backlog; Positive Long-Term Outlook

Charles River Laboratories reported second-quarter results highlighted by revenue of $1.06 billion, representing a 9% increase compared to the prior year period. Charles River is tracking our expectations for the year, and we maintain our fair value estimate of $260 per share. We view the stock as undervalued, currently trading in 4-star territory, about 17% below our fair value estimate. We reaffirm our narrow moat rating, which is based on intangible assets and switching costs associated with its animal research models and its preclinical discovery and safety assessment services.