Catalent (NYSE:CTLT) was cut to Neutral from Overweight with a $45 price target, down from $90 per share by JPMorgan analysts on Friday.
They told investors that operational fixes are in sight, but accounting questions loom, and they are downgrading the stock based on limited near-term visibility.
On Friday, instead of its F3Q results, CTLT provided a business update, discussing the productivity and operational issues experienced in the quarter, as well as its guidance.
"CTLT provided an updated FY23 guidance with revenues now expected at $4.25 - $4.35B (vs $4.625 - $4.875B previously) and EBITDA expected at $725 - 775M (vs $1.220 - $1.3B previously)," explained the analysts.
"Although the lowered guidance could provide a floor with inflection in FY24, the customer perception and morale could negatively impact the project pipeline."
The analysts stated that although the firm continues to believe in the long-term opportunities for CTLT, the current productivity issues, accounting reviews and delay in F3Q filing, risk of restatement, continuous PCH business weakness, and macro headwinds limit the company's near-term visibility.