Catalent stock soars to record high

Catalent Inc. (CTLT) stock soared to a record high of $50.62 on Wednesday as investors were satisfied with the company’s future after the third quarter earnings results and the completion of the purchase of gene therapy developer Paragon Bioservices for $1.2 billion in cash.

Investors were interested in the strength and direction of the opinion signals of Catalent that showed an 80% buy during last month, while it showed 100% buy on Tuesday. Majority of the analysts recommended a “strong buy” or “buy” rating while expecting the stock to reach $54 in the next 52 weeks.

The company was formed through a series of drug delivery acquisitions by Cardinal Health (CAH), executed between 1998 and 2006. Catalent, which went public in 2014, was rebranded after Blackstone (BX) purchase of Cardinal’s Pharmaceutical Technologies and Services division in 2007.

For the third quarter, the company reported a 2% decline year-over-year but increased by 2% in constant currency. This was primarily driven by the Biologics and Specialty Drug Delivery segment and the impact of the Juniper Pharmaceuticals acquisition within the Oral Drug Delivery segment.

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The company’s earnings climbed by 67% year-over-year as its Biologics and Specialty Drug Delivery and Oral Drug Delivery segments continue to meet its overall expectations. The results were benefited by lower interest expenses and other income as well as lower income tax expenses during the latest quarter.

Looking ahead into fiscal 2019, the company expects revenue in the range of $2.50 billion to $2.52 billion and adjusted net income in the range of $268 million to $278 million. Adjusted EBITDA is predicted to be in the range of $605 million to $615 million. The company expects self-funded capital expenditures in the range of $175 million to $185 million and fully diluted share count in the range of 146 million to 147 million shares on a weighted-average basis.

Shares of Catalent opened higher on Wednesday but changed course to the red territory after reaching a record high on the NYSE. The stock has risen over 24% in the past year and over 18% in the past three months.

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