What Happened?
Shares of lab services company Charles River Laboratories (NYSE: CRL) jumped 2.6% in the afternoon session after the stock's positive momentum continued, as Barclays upgraded the company to Overweight from Equal Weight and raised its price target.
The investment bank increased its price target for Charles River to $195, up from $155. Analysts at the firm cited signs that drug discovery cancellations had begun to normalize and that bookings had stabilized about a year ago. The decision was also supported by checks suggesting that budgets at large pharmaceutical and bigger biotech companies were holding up. This improved outlook led to heightened optimism among analysts regarding the company's prospects.
After the initial pop the shares cooled down to $179.33, up 2.3% from previous close.
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What Is The Market Telling Us
Charles River Laboratories’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 1.9% on the news that Barclays upgraded the company to Overweight from Equal-Weight and raised its price target. The investment bank increased its price target for Charles River to $195, citing signs that drug discovery cancellations had started to normalize and that bookings had stabilized. Analysts at the firm noted that checks suggested budgets at large pharmaceutical and bigger biotech companies were holding up. They also viewed the company hiring more staff to meet demand as a strong signal that management had confidence conditions would not worsen in the near term.
Charles River Laboratories is down 1.8% since the beginning of the year, and at $179.33 per share, it is trading 18.7% below its 52-week high of $220.69 from November 2024. Investors who bought $1,000 worth of Charles River Laboratories’s shares 5 years ago would now be looking at an investment worth $763.20.
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