After extending its manufacturing partnership with Moderna, the Catalent company in New Jersey has gained a more bullish outlook from Deutsche Bank.
A price target of $88 per share has been set for Catalent shares, saying that Deutsche Bank has upgraded the shares from hold to buy. According to Monday's closing price of $67.26, that represents a highly positive opportunity for investors with an upside of more than 30%.
A Deutsche Bank analyst wrote on Monday, “The renewal of the Moderna partnership and the expansion of the contract is a strategic win for Catalent and minimizes the tail risk associated with terminal value and investor concerns over poor market positioning at the terminal,” Bowers said.
According to him, Catalent stock, which jumped 3.6% on the back of the upgrade, has already recorded a greater gain than the S&P 500 index, which saw a gain of 7% this year, and now stands at 49%, compared with seven percent for the index.
Bowers said he expects the stock to continue to rise in the coming months. SRP-9001, an investigational gene therapy for Duchenne Muscular Dystrophy being developed by Sarepta Therapeutics, has just been approved by the FDA in two Catalent production plants.
“It's estimated that the market opportunity for [contract development and manufacturing organizations, or] CDMOs with SPR-9001 could be greater than $12b in the event that they fully penetrate the market, and Catalent, no doubt, will lead the process," Bowers said.
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