NEW YORK (AP) -- A Citi Investment Research analyst lowered Charles River Laboratories International Inc.'s rating and price target on Wednesday, citing concerns about increased competition and the impact of recent federal budget cuts.
Garen Sarafian cut the medical research equipment and services provider's rating to "Sell" from "Hold" and reduced its price target to $37 from $42.
The analyst said in a client note that the markets Charles River competes in are getting more competitive, with more aggressive pricing in toxicology. Sarafian said that Charles River's toxicology offerings in its pre-clinical services unit comprise 38 percent of sales and 25 percent of profit. But the analyst said that industry channel checks have confirmed that toxicology prices have dropped compared with a year earlier when they were usually considered stable.
Further, the automatic federal spending cuts that began last month took a 5.1 percent bite out of the National Institute of Health's budget. This is a concern for Charles River because 24 percent of its revenue comes from the worldwide academic/government sector.
A call to a representative for Charles River for comment was not immediately returned.
Its shares finished at $44.16 on Tuesday.
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