Analyst comments: "CRL and peers have seen DSA bookings improve in 1H25 (weighted avg bookings up 22% in 1Q and 8% in 2Q YoY). CRL's 2Q bookings took a step down sequentially, but that's consistent with historical patterns, and typical DSA revenue seasonality suggests 2H guidance is conservative. We are now modeling 2H DSA revenue 5% higher than consensus/guidance, which drives consolidated EPS ~2% higher than street expectations in FY25.
Moreover, CRL has several ways to create value via a sale of all or part of the MS segment. Given activist involvement and the ongoing strategic review, value extraction seems likely and downside limited. Valuation isn't demanding either (~13.5x '26 P/E). We recognize the strategic review isn't new, but the outcome is closer, and we are more comfortable that numbers are stable."
Analyst: David Windley