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Catalent (CTLT) Stock Jumps 6.8%: Will It Continue to Soar?

Zacks Equity Research
·2-min read

Catalent CTLT shares rallied 6.8% in the last trading session to close at $50.12. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 27.4% loss over the past four weeks.

Share price likely rose amid speculations that Danaher may still be interested in acquiring the company. Last month, Bloomberg reported that Danaher had shelved this buyout plan after Catalent announced that it was facing productivity problems and high-than-expected costs at three of its major production facilities.

This maker of drug delivery technologies is expected to post quarterly earnings of $0.55 per share in its upcoming report, which represents a year-over-year change of -47.1%. Revenues are expected to be $1.1 billion, down 13.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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For Catalent, the consensus EPS estimate for the quarter has been revised 10.4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CTLT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Catalent is a member of the Zacks Medical - Drugs industry. One other stock in the same industry, ProPhase Labs, Inc. PRPH, finished the last trading session 1.2% lower at $7.50. PRPH has returned 1.7% over the past month.

For ProPhase Labs, Inc. , the consensus EPS estimate for the upcoming report has changed +16.7% over the past month to -$0.09. This represents a change of -113.2% from what the company reported a year ago. ProPhase Labs, Inc. currently has a Zacks Rank of #2 (Buy).

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Zacks Investment Research