AI partnership with Lilly TuneLab puts Charles River Laboratories International stock in focus

Charles River Laboratories International (CRL) has drawn fresh attention after announcing a collaboration with Lilly TuneLab, an AI and machine learning drug discovery platform created by Eli Lilly and Company.

The agreement positions Charles River to supply nonclinical testing services to TuneLab participants, standardizing protocols across the platform and supporting AI models that aim to streamline how biotech companies select and advance candidate molecules.

The Lilly TuneLab partnership arrives during a strong upswing, with Charles River Laboratories International posting a 7 day share price return of 13.35% and a 30 day share price return of 25.83%. The 1 year total shareholder return of 45.46% contrasts with a weaker 5 year total shareholder return of 40.21%.

If you are looking beyond Charles River for other AI linked opportunities in healthcare, this could be a useful moment to review 39 healthcare AI stocks

With Charles River Laboratories International stock rallying on the Lilly TuneLab news and trading slightly above the average analyst price target, the key question is simple: is this enthusiasm justified, or are markets already pricing in future growth?

Most Popular Narrative: 27% Undervalued

Charles River Laboratories International last closed at $229.09, while the most followed narrative on Simply Wall St points to a fair value of $313.61, creating a sizeable valuation gap that has caught investor attention.

The Hidden Bottleneck in Drug Development: Why Charles River Acquired a Cambodian Primate Supplier

On January 12, 2026, Charles River Laboratories announced that it had signed an agreement to acquire the assets of K.F. (Cambodia) Ltd., a major non-human primate (NHP) breeding and supply company. [$510M]

At first glance, this transaction might appear to be a routine supply chain acquisition in the contract research organization (CRO) industry. However, the deeper implication is far more significant. The deal effectively expands and secures access to NHP supply, highlighting how critical primate availability has become in modern drug development. In other words, this acquisition reveals one of the hidden bottlenecks in the pharmaceutical research ecosystem: the supply of non-human primates.

Want to understand why this narrative values Charles River Laboratories so far above the market price? It leans heavily on robust margin assumptions and a future earnings profile that treats the company less like a traditional CRO and more like a high quality compounder. Curious which revenue path and profit structure underpin that view? The full narrative lays out the exact numbers that drive the $313.61 fair value.

Result: Fair Value of $313.61 (UNDERVALUED)

However, this Charles River Laboratories narrative could be challenged if NHP supply faces new regulatory constraints or if AI-led drug discovery reduces reliance on primate testing.

Another view on Charles River Laboratories International's value

That user narrative leans on a fair value of $313.61, but our DCF model paints a very different picture, with an estimate of $76.49 per share, which would frame Charles River Laboratories International as significantly overvalued at the current $229.09 price. Which story do you find more convincing?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Charles River Laboratories International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 41 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With Charles River Laboratories International attracting both optimism and concern, this could be a good time to move quickly. Review the numbers yourself, weigh the trade off between risks and rewards, and check the 2 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.