Despite Price Cut, RBC Capital Is Bullish On Catalent's Long Term Targets

RBC Capital Markets cut the price target on Catalent Inc CTLT from $155 to $125 with an Outperform rating.
The analyst notes that the company reported mixed Q4 FY22 earnings as revenue was 1% below consensus and EBITDA 1.5% above.
Related: Catalent Reports Mixed Q4 Earnings; FY23 Sales Expectation Lags Consensus.
Adjusting for foreign exchange, EBITDA guidance did come in below consensus due to supply chain and inflationary pressures and lower expected capacity utilization as COVID business tapers, and new facilities come online.
The FY23 EBITDA guidance of $1.31-1.39 billion, which, even adjusting for the 4% FX headwind, still falls short of the consensus of $1.418 billion by 1%
RBC is bullish, citing that the company remains very confident it can still achieve its FY26 30% EBITDA margin target, supported partly by an ongoing realignment of its commercial organization.
The analyst says the stability and durability of its business, coupled with investments into growth-focused and margin-accretive opportunities, put Catalent in a position to achieve its FY26 margin targets.
Price Action: CTLT shares are down 2.86% at $89.64 on the last check Tuesday.

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