By Catalent shares have experienced an extraordinary surge following their agreement with Elliott Management. This has left investors and analysts wondering just how much more the stock can advance.
After settling with Elliott and appointing four new directors to its board, as well as agreeing to conduct a strategic review, Catalent shares (ticker: CTLT) received a boost in confidence from both investors and analysts. The stock experienced a remarkable increase of nearly 12% in just one week, reaching $50.20. Analysts responded positively to this update by raising their price targets and expressing their optimism in various reports.
While acknowledging that the next couple of quarters may be challenging, Baird analyst Eric Coldwell remains hopeful about the future, stating, “It’s difficult not to see light at the end of this tunnel.”
As Catalent shares had endured a tumultuous year with a 50% decline, including issues with delayed financial filings and reduced guidance, this recent turnaround is a welcome change. The company aggressively expanded during the pandemic, partnering with Moderna (MRNA) in the production of its Covid vaccine. Unfortunately, production problems at one of its plants caused setbacks.
Despite the growing positivity surrounding Catalent shares, the current average price target stands at $51.75, which is relatively close to recent trading levels. Additionally, only 35% of analysts surveyed by FactSet have given the shares a Buy rating equivalent. It is worth noting that Elliott’s stake in Catalent was made public in July.
In a statement on Tuesday, Elliott portfolio manager Marc Steinberg expressed his satisfaction with Catalent’s updates, emphasizing that they are “critical steps toward ensuring that Catalent reaches its full potential.”
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