Wells Fargo Upgrades Charles River Labs (CRL) to Outperform on Major Sell-Off

December 13, 2012 7:01 AM EST
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Price: $80.02 +0.29%

Rating Summary:
    10 Buy, 12 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Wells Fargo upgraded Charles River Labs (NYSE: CRL) from Market Perform to Outperform with a valuation range of $40-$42, saying shares are oversold following Wednesday's 9% swoon on guidance.

The firm comments, "We are upgrading shares of CRL to Outperform from Market Perform following the company's 2013 guidance announcement yesterday (12/12). We think shares are oversold after a 9% decline (vs. an increase of 0.04% in the S&P 500), given that the guidance midpoint is only 5% below consensus. We also think guidance is conservative based on (1) our modeling of FX, (2) accretion from Vital River, and (3) potential upside from partnerships. We believe this is a good entry point because we think 2013 could be the beginning of a slow improvement in the preclinical portion of the market."

The firm cut 2012E/2013E EPS to $2.69/$2.90 from $2.72/$2.99 previously.

For an analyst ratings summary and ratings history on Charles River Labs click here. For more ratings news on Charles River Labs click here.

Shares of Charles River Labs closed at $35.65 yesterday.

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