Charles River Earnings: Near-Term Macroeconomic Challenges Affect Sales; Positive Long-Term Outlook

Narrow-moat Charles River Laboratories ended 2024 with slightly better-than-expected performance amid a challenging macroeconomic environment, and investors sent the stock up 7%. Full-year revenue of $4.05 billion represented about a 2% decrease compared to 2023. Revenue grew by nearly 5% in the research models and services segment and increased by over 6.5% in the manufacturing solutions segment, but these gains were offset by a revenue decrease of 6% in the discovery and safety assessment business. We lowered our fair value estimate to $215 per share from $260 due to softer near-term results from macroeconomic pressures. However, the stock is still trading at an attractive entry point for long-term investors.