Extending its streak of declines, Catalent (CTLT -7.37%) stock fell again on Tuesday. The contract drug manufacturer’s shares lost more than 7% of their value on a day when the S&P 500 index essentially traded flat. A pair of analysts’ price target cuts were the apparent catalysts for this latest slide.
On Tuesday morning, prognosticators from Barclays (BCS 0.52%) and Deutsche Bank (DB 1.02%) made downward adjustments to their Catalent targets.
Of the two, the change by Barclays’ Luke Sergott was by far the more dramatic. Sergott chopped his price target to $40 per share — quite the downshift from his previous target of $70. He didn’t, however, adjust his recommendation on the specialty healthcare stock, which remains at equal weight (hold, in other words).
Not surprisingly, the Barclays analyst cited as a key factor in his decision Danaher‘s (DHR 0.15%) Monday announcement that it would not pursue an acquisition of Catalent at this time. That, in turn, was likely heavily influenced by Catalent’s Friday announcement that revenue for its fiscal third quarter will probably come in well below both the company’s guidance and analysts’ consensus estimates.
The reasons behind the price target cut from Deutsche Bank’s Justin Bowers weren’t immediately clear. He made a relatively modest move, trimming his target to $72 per share from $78 per share. He’s more bullish than his Barclays colleague, as he’s keeping his buy recommendation on Catalent intact.
The twin cuts contributed to the gloom currently hanging over Catalent stock. Few investors seem interested in buying into a business that’s taking big revenue hits and has been abandoned at the altar.