Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5974
    -0.0031 (-0.52%)
     
  • NZD/EUR

    0.5532
    -0.0011 (-0.19%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.07
    +1.72 (+2.11%)
     
  • GOLD

    2,246.00
    +33.30 (+1.50%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • NZD/JPY

    90.3670
    -0.4130 (-0.46%)
     

Catalent (CTLT) to Report Q3 Earnings: What's in the Cards? (Revised)

Catalent, Inc. CTLT is scheduled to report third-quarter fiscal 2023 results on May 15, before market open.

In the last reported quarter, the company’s earnings of 67 cents per share lagged the Zacks Consensus Estimate by 6.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on two occasions and missed the same in the other two, delivering a negative earnings surprise of 7.8%, on average.

Let’s see how things have shaped up prior to this announcement:

Factors to Note

Biologics Business

Per Catalent’s fiscal 2023 second-quarter earnings update in February, it will be extending and expanding its manufacturing partnership with Moderna. Hence, the company will support the manufacture of multiple Moderna products in multiple formats across its North American and European biologics drug product facilities.

ADVERTISEMENT

Catalent will continue to provide drug product fill/finish services and production capacity for Moderna’s COVID-19 programs. Additionally, Catalent also shared its plans to extend their ongoing partnership to non-COVID-19 programs such as flu and respiratory syncytial virus vaccines, beginning with its manufacturing site in Bloomington and Indiana that will be expanded to its European facility in Anagni, Italy. This is likely to have benefited Catalent’s revenues in the to-be-reported quarter.

Moreover, Catalent’s expanded partnership with Sarepta Therapeutics, Inc. in January also looks promising for the stock.

In January, Catalent announced the opening of a new commercial-scale plasmid DNA manufacturing facility at its European center of excellence for cell therapies in Gosselies, Belgium. In March, Catalent announced the expansion of its UpTempo platform process for the development and cGMP (current good manufacturing practices) manufacturing of adeno-associated viral vectors. These are likely to be the other contributors to the company’s revenues in the fiscal third quarter.

Catalent is also likely to have benefited from its expansion program to increase biologics cGMP analytical capabilities at its flagship facility in Kansas City, MO.

Catalent, Inc. Price and EPS Surprise

Catalent, Inc. Price and EPS Surprise
Catalent, Inc. Price and EPS Surprise

Catalent, Inc. price-eps-surprise | Catalent, Inc. Quote

Pharma and Consumer Health

In the last reported quarter, the segment's revenue growth was primarily driven by Catalent’s acquired Metrics business. The company is likely to have continued to benefit from the acquired business in the fiscal third quarter, thereby pushing up the segmental revenues.

In February, Catalent announced the completion of a $2.2 million expansion to its clinical supply facility in Singapore, which was expected to create the space to install an additional 35 new freezers for ultra-low temperature storage. This is likely to have contributed to the company’s fiscal third-quarter revenues.

Another likely contributor to Catalent’s fiscal third-quarter revenues includes the Waigaoqiao Free Trade Zone in Shanghai, China.

In March, Catalent announced the launch of the ProteoSuite Oral suite, which allows the rational selection of orally developable targeted protein degrader candidates and their advancement into clinical trials. The same month, Catalent signed a commercial supply agreement with Harm Reduction Therapeutics.

Also in March, Catalent announced a licensing agreement with Bhami Research Laboratory. Again, in March, Catalent announced its successful formulation design and clinical-phase manufacturing collaboration with Grünenthal for an orally dosed small molecule in the latter’s pipeline.

In January, Catalent executed a development and license agreement with Ethicann Pharmaceuticals Inc. to develop Ethicann’s clinical drug pipeline using its proprietary Zydis orally disintegrating tablet technology. These developments raise our optimism regarding the stock.

The Estimate Picture

For third-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues of $1.10 billion implies a decline of 13.7% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at 55 cents, implying a decline of 47.1% from the prior-year quarter’s reported number.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP has higher chances of beating estimates. This is not the case here, as you can see below.

Earnings ESP: Catalent has an Earnings ESP of -34.55%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Ikena Oncology, Inc. IKNA has an Earnings ESP of +10.38% and a Zacks Rank of 2. IKNA has an estimated growth rate of 13.2% for 2023. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ikena Oncology’s projected sales growth of 63.5% compares favorably with the industry’s 2.3%.

Nurix Therapeutics, Inc. NRIX has an Earnings ESP of +5.43% and is a Zacks #2 Rank stock. NRIX has an estimated growth rate of 12.7% for fiscal 2023.

Nurix Therapeutics’ projected sales growth of 36.9% compares favorably with the industry’s 2.3%.

Surrozen, Inc. SRZN has an Earnings ESP of +13.86% and sports a Zacks Rank of 1 at present. SRZN has an estimated long-term growth rate of 38.4%.

Surrozen’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 43.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

(We are reissuing this article to correct a mistake. The original article, issued on May 8, 2023, should no longer be relied upon.)

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Catalent, Inc. (CTLT) : Free Stock Analysis Report

Nurix Therapeutics, Inc. (NRIX) : Free Stock Analysis Report

Ikena Oncology, Inc. (IKNA) : Free Stock Analysis Report

Surrozen, Inc. (SRZN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research