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Here's Why You Should Hold on to Catalent (CTLT) Stock Now
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Catalent, Inc. (CTLT - Free Report) is well-poised for growth in the coming quarters, backed by its robust facility-expansion activities over the past few months. A robust third-quarter fiscal 2022 performance, along with a slew of strategic deals over the past few months, is expected to contribute further. Catalent’s operation in a competitive landscape and regulatory requirements pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 13.9% compared with a 24.6% fall of the industry and 4.6% decline of the S&P 500.
This renowned global provider of advanced delivery technologies has a market capitalization of $19.05 billion. Catalent projects 16.5% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 9.2% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Expansionary Activities: We are upbeat about Catalent’s robust expansionary activities, like opening a slew of facilities over the past few months. In June, the company announced that it had expanded its primary packaging capabilities at its clinical supply facility in Shiga, Japan. The company has installed a high-speed blister packaging line to augment its existing automated bottling line.
In May, Catalent announced that it commenced a $175-million project to expand its flagship U.S. manufacturing facility for large-scale oral dose forms in Winchester, KY.
Strategic Deals: We are optimistic about Catalent’s robust growth opportunities via its recent tie-ups and buyouts. This month, the company reached an agreement to acquire Metrics Contract Services (a full-service specialty Contract Development and Manufacturing Organization) with a facility in Greenville, NC from Mayne Pharma Group Limited.
In June, Catalent entered into a development agreement with MigVax to leverage its proprietary Zydis Bio orally disintegrating tablet technology for delivering the MigVax-101 vaccine.
Strong Q3 Results: Catalent’s solid third-quarter fiscal 2022 results, along with the year-over-year uptick in the top and bottom lines, buoy optimism. Continued strength in its Biologics arm in the quarter under review looks encouraging. Robust performances by the Clinical Supply Services, and the Softgel and Oral Technologies segments also raise optimism. A raised financial outlook for the year heightens our positivity regarding the stock.
Downsides
Regulatory Requirements: The healthcare industry is highly regulated, wherein Catalent and its customers are subject to various local, state, federal, national and transnational laws and regulations. Any future change to such laws and regulations could affect the company. Failure by Catalent or its customers to comply with the requirements of these regulatory authorities could result in warning letters, among others.
Stiff Competition: Catalent operates in a highly competitive market, wherein it competes with multiple companies, including those offering advanced delivery technologies and outsourced dose form or biologics manufacturing. The company also competes in some cases with the internal operations of those pharmaceutical, biotechnology and consumer health customers that also have manufacturing capabilities and choose to source these services internally.
Estimate Trend
Catalent is witnessing a flat estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has remained unchanged from $3.79.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2022 revenues is pegged at $1.33 billion, suggesting a 12.1% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 2.6% compared with the industry’s 29.9% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 7.9%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.8% against the industry’s 6.7% fall over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 83.9% against the industry’s 6.7% fall over the past year.
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Here's Why You Should Hold on to Catalent (CTLT) Stock Now
Catalent, Inc. (CTLT - Free Report) is well-poised for growth in the coming quarters, backed by its robust facility-expansion activities over the past few months. A robust third-quarter fiscal 2022 performance, along with a slew of strategic deals over the past few months, is expected to contribute further. Catalent’s operation in a competitive landscape and regulatory requirements pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 13.9% compared with a 24.6% fall of the industry and 4.6% decline of the S&P 500.
This renowned global provider of advanced delivery technologies has a market capitalization of $19.05 billion. Catalent projects 16.5% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 9.2% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Expansionary Activities: We are upbeat about Catalent’s robust expansionary activities, like opening a slew of facilities over the past few months. In June, the company announced that it had expanded its primary packaging capabilities at its clinical supply facility in Shiga, Japan. The company has installed a high-speed blister packaging line to augment its existing automated bottling line.
In May, Catalent announced that it commenced a $175-million project to expand its flagship U.S. manufacturing facility for large-scale oral dose forms in Winchester, KY.
Strategic Deals: We are optimistic about Catalent’s robust growth opportunities via its recent tie-ups and buyouts. This month, the company reached an agreement to acquire Metrics Contract Services (a full-service specialty Contract Development and Manufacturing Organization) with a facility in Greenville, NC from Mayne Pharma Group Limited.
In June, Catalent entered into a development agreement with MigVax to leverage its proprietary Zydis Bio orally disintegrating tablet technology for delivering the MigVax-101 vaccine.
Strong Q3 Results: Catalent’s solid third-quarter fiscal 2022 results, along with the year-over-year uptick in the top and bottom lines, buoy optimism. Continued strength in its Biologics arm in the quarter under review looks encouraging. Robust performances by the Clinical Supply Services, and the Softgel and Oral Technologies segments also raise optimism. A raised financial outlook for the year heightens our positivity regarding the stock.
Downsides
Regulatory Requirements: The healthcare industry is highly regulated, wherein Catalent and its customers are subject to various local, state, federal, national and transnational laws and regulations. Any future change to such laws and regulations could affect the company. Failure by Catalent or its customers to comply with the requirements of these regulatory authorities could result in warning letters, among others.
Stiff Competition: Catalent operates in a highly competitive market, wherein it competes with multiple companies, including those offering advanced delivery technologies and outsourced dose form or biologics manufacturing. The company also competes in some cases with the internal operations of those pharmaceutical, biotechnology and consumer health customers that also have manufacturing capabilities and choose to source these services internally.
Estimate Trend
Catalent is witnessing a flat estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has remained unchanged from $3.79.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2022 revenues is pegged at $1.33 billion, suggesting a 12.1% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has lost 2.6% compared with the industry’s 29.9% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 7.9%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.8% against the industry’s 6.7% fall over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 83.9% against the industry’s 6.7% fall over the past year.