Catalent Announces Cooperation Agreement With Elliot Investment: Analysts’ Price Recommendations
30 Agosto 2023 - 10:39AM
IH Market News
Catalent (NYSE:CTLT) announced a cooperative agreement with
activist investor Elliott Investment Management and separately
released an upbeat full-year earnings outlook, even as it reported
lower fourth-quarter fiscal results year-over-year.
Under the terms of the agreement, the drugmaker appointed four
new independent directors and formed a strategic committee to
review its commercial and operational strategy. John Greisch, who
has served on the company’s board since 2018, will become executive
chairman of the board and head the new committee, which will
include two of the newly appointed directors.
Elliott, one of Catalent’s “biggest investors,” agreed to “the
usual shutdown, voting, confidentiality and other provisions,” the
drugmaker said. Among other things, Elliott will not increase its
beneficial ownership above 10% in Catalent, or its aggregate
economic exposure beyond 14.9%, according to a regulatory filing
from the pharmaceutical maker. Its shares advanced 4.9% in
Tuesday’s midday trade.
“The company will continue to take decisive action to strengthen
operating performance, increase profitability and create value for
all shareholders and other stakeholders,” Catalent Chief Executive
Alessandro Maselli said in a statement. “We believe the actions
announced today will further position Catalent for long-term growth
and success.”
The changes “represent critical steps to ensure Catalent
achieves its full potential,” said Elliott Senior Portfolio Manager
Marc Steinberg.
For fiscal 2024, the company expects revenues of $4.3 billion to
$4.5 billion, while the current consensus among Capital IQ analysts
is $4.21 billion. In the fiscal year just ended, revenue fell 11%
to $4.28 billion. She forecasts adjusted net income between $113
million and $175 million.
The drug maker reported adjusted earnings of 9 cents per share
for the fiscal fourth quarter ended June 30, down from 1.08 cents a
year earlier and just short of Street’s view of 10 cents. Revenue
fell 17% to $1.07 billion, but beat analysts’ estimate of $1.05
billion.
Sales in the biologics division fell to $406 million from $645
million in the 2022 quarter, primarily “driven by significantly
lower year-over-year demand (COVID-19 vaccine),” Chief Financial
Officer Matti Masanovich said during a conference call, according
to a Capital IQ transcript. Pharmaceutical and consumer health
revenues increased to $662 million from $643 million due to the
company’s acquisition of Metrics in October, according to
Masanovich.
“We continue to make progress in improving our operating
performance and winning new business with new and existing
customers, including in some of the most exciting areas of the
industry, putting us on a path towards more sustainable and
profitable growth and exit from the market. fiscal year 2024 in a
much stronger operational and financial position,” Maselli said in
a statement.
ANALYSTS’ RECOMMENDATIONS
Catalent (CTLT) has an average hold rating and target price
range of $39 to $65, according to analysts polled by Capital
IQ.
Wells Fargo adjusts Catalent price target to $50 from $43,
maintains equal weight rating.
Baird adjusts Catalent price target from $47 to $49, maintains
neutral rating.
Morgan Stanley adjusts Catalent price target to $55 from $52,
maintains overweight rating.
JPMorgan Chase adjusts Catalent price target from $45 to $48,
maintains neutral rating.
Catalent (NYSE:CTLT)
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