Deutsche Bank is more optimistic about Catalent after the New Jersey-based company expanded its manufacturing partnership with Modern.
Catalent the shares were upgraded to Buy on Hold on Monday with a target price of $88 per share, Deutsche Bank said. This represents more than 30% upside potential for investors, based on Monday’s closing price of $67.26.
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“The renewal and expansion of the Moderna partnership is a strategic win for Catalent that reduces tail risk and alleviates investor concerns about terminal value due to weakened market positioning,” Deutsche Bank analyst Justin Bowers wrote on Monday.
On Monday, Deutsche Bank upgraded Catalent from Hold to Buy with a target price of $88 per share.
He added that Catalent shares, which rose 3.6% on the upgrade, had already outperformed stocks. S&P 500 this year with a gain of 49% compared to the growth of the key index by 7%.
Bowers said he expects more growth. Two Catalent manufacturing facilities recently received FDA clearance to manufacture SRP-9001. Sarepta Therapy experimental gene therapy for Duchenne muscular dystrophy.
“We evaluate [contract development and manufacturing organization, or] The CDMO market opportunity for SPR-9001 could be as high as $12 billion at full penetration, and Catalent will lead the way in viral vector production at this stage,” Bowers said.
— Michael Bloom of CNBC