Overview

• Drug discovery services firm's Q1 revenue rose 1.2%, beating analyst expectations

• Adjusted EPS for Q1 was $2.06, beating analyst expectations

• Company completed CDMO and Cell Solutions divestiture, repurchased $200 mln of stock

Outlook

• Charles River reaffirms 2026 organic revenue and non-GAAP EPS guidance

• Company lowers 2026 reported revenue outlook by ~50 basis points due to FX assumptions

• Charles River expects 2026 non-GAAP EPS of $10.80–$11.30 and organic revenue decline of 1.5%–0.5%

Result Drivers

• RMS WEAKNESS - Organic revenue in Research Models and Services fell due to lower demand for small research models in North America and large research models, partly offset by higher revenue for small models in China

• DSA DECLINE - Organic revenue in Discovery and Safety Assessment decreased, driven by lower discovery services revenue, partly due to prior site consolidation activities

• HIGHER COSTS - Non-GAAP operating margin fell mainly due to higher study-related direct costs in DSA, unfavorable revenue mix in RMS, and increased stock-based compensation related to executive transition

Company press release: ID:nBw1jrqcSa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Beat	$995.80 mln	$977.49 mln (11 Analysts)
Q1 Adjusted EPS	Beat	$2.06	$1.94 (13 Analysts)
Q1 EPS		-$0.30
Q1 Adjusted Net Income	Slight Beat*	$101.70 mln	$101.46 mln (8 Analysts)

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the biotechnology & medical research peer group is "buy"

• Wall Street's median 12-month price target for Charles River Laboratories International Inc is $200.00, about 10.1% above its May 6 closing price of $181.73

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 19 three months ago

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