Catalent Stock Soars on Agreement With Activist Investor Elliott Management

Catalent
shares saw an enormous run since entering into an agreement with Elliott Management this past week. The question is, how much further can the stock advance?

Investors and analysts alike appeared more bullish on Catalent shares (ticker: CTLT) after the drug manufacturer settled with Elliott and added four new directors to its board and agreed to conduct a strategic review. The stock was up nearly 12% on the week, to $50.20, after several analysts wrote favorably about the update and raised their price targets.

“Next couple quarters look rough, though it’s difficult not to see light at the end of this tunnel,” Baird analyst Eric Coldwell wrote on Wednesday.

Catalent shares were down roughly 50% over the past 12 months amid a host of troubles at the company, including delayed financial filings and reduced guidance. Catalent grew aggressively during the pandemic and partnered with
Moderna
(MRNA) in making its Covid vaccine, only to get hit by production problems at one of its plants.

But even with the improving sentiment, the average price target is $51.75, very close to recent trading levels. And only 35% of analysts surveyed by FactSet rate shares the equivalent of a Buy. Elliott’s stake in Catalent became public in July.

In a statement on Tuesday, Elliott portfolio manager Marc Steinberg said Catalent’s updates “represent critical steps toward ensuring that Catalent reaches its full potential.”

Write to Carleton English at [email protected]

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