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Charles River Laboratories International Inc CRL

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Charles River Benefits From Lower Tax Rate; Raising FVE to $244, Yet Shares Remain Expensive

Rachel Elfman Equity Analyst

Analyst Note

| Rachel Elfman |

Charles River reported third-quarter revenue of $896 million, representing an increase of 21% from the prior-year period. GAAP earnings per share of $2.01 was up from $1.72 in the second quarter. We’ve updated our model with the latest results, and we raised our fair value estimate to $244 per share from $225 due to management’s lower-than-expected tax rate for 2021, $115 million in recent divestitures, and the impact of the time value of money. We maintain our narrow moat, which is based on intangible assets and switching costs associated with Charles River’s leading research models and its discovery and safety assessment services.

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Company Profile

Business Description

Charles River Laboratories was founded in 1947 and is a leading provider of drug discovery and development services. The company's research model & services segment is the leading provider of animal models for laboratory testing, which breeds and delivers animal research models with specific genetic characteristics for preclinical studies around the world. The discovery & safety assessment segment includes services required to take a drug through the early development process, including discovery services. The manufacturing support segment includes microbial solutions, which provides in vitro (non-animal) testing products, biologics testing services, and avian vaccine services.

251 Ballardvale Street
Wilmington, MA, 01887
T +1 781 222-6000
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 18,400