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Deutsche Bank is more bullish on Catalent after the New Jersey-based company expanded its manufacturing partnership with Moderna.
Catalent shares were upgraded to buy from hold on Monday, with a price target of $88 per share, Deutsche Bank said. That represents more than 30% upside for investors, based on Monday’s closing price of $67.26.
“The Moderna partnership renewal and expansion is a strategically important win for Catalent and diminishes tail risk and investor concerns around terminal value due to weakened market positioning,” Deutsche Bank analyst Justin Bowers wrote on Monday.
Catalent received an upgrade from Deutsche Bank on Monday from hold to buy with a price target of $88 per share.
He added that Catalent stock, which gained 3.6% on the back of the upgrade, has already outperformed the S&P 500 this year with a gain of 49% compared with the key index’s 7% advance.
Bowers said he anticipates more upside ahead. Two Catalent production plants recently won FDA approval to manufacture SRP-9001, Sarepta Therapeutics’ investigational gene therapy for Duchenne Muscular Dystrophy.
“We estimate the [contract development and manufacturing organization, or] CDMO market opportunity for SPR-9001 could be as great as $12b under full penetration, with Catalent leading viral vector production at his juncture,” Bowers said.
—CNBC’s Michael Bloom contributed to this report.