Abstract

Charles River Laboratories will release its quarterly results on February 18, 2026 Pre-Market; investors are watching revenue stability, margins, and adjusted EPS as management navigates operational initiatives across Discovery and Safety Assessment and manufacturing-related services.

Market Forecast

For the current quarter, the latest forecast points to revenue of US dollars 987.00 million, reflecting a 0.34% year-over-year increase, adjusted EPS estimated around US dollars 2.34, down 7.44% year-over-year, and EBIT of US dollars 180.40 million, down 7.30% year-over-year; formal guidance for gross profit margin and net profit margin is not provided, with the prior quarter’s gross margin of 35.04% and net margin of 5.42% serving as reference points. The primary revenue driver remains Discovery and Safety Assessment, which demonstrated scale last quarter and is positioned to benefit from recent supply-chain and program execution steps; Research Models and Services and Manufacturing provide complementary contributions.

The most promising segment in terms of near-term catalysts is Discovery and Safety Assessment, which produced US dollars 600.69 million last quarter; year-over-year growth by segment was not disclosed, but expected momentum is tied to supply chain enhancements and program flow-through from sponsor demand.

Last Quarter Review

In the previous quarter, Charles River Laboratories reported revenue of US dollars 1.00 billion (year-over-year -0.49%), a gross profit margin of 35.04%, GAAP net profit attributable to shareholders of US dollars 54.42 million with a net profit margin of 5.42%, and adjusted EPS of US dollars 2.43 (year-over-year -6.18%), with EBIT at US dollars 197.73 million (year-over-year -1.36%).

A notable highlight was a modest topline beat versus internal expectations and external estimates, with revenue exceeding forecasts by US dollars 14.08 million; in addition, the net profit attributable to shareholders increased 4.01% quarter-over-quarter, signaling sequential stabilization in profitability despite a softer year-over-year comparison. Within the main businesses, Discovery and Safety Assessment delivered US dollars 600.69 million, Research Models and Services contributed US dollars 213.47 million, and Manufacturing provided US dollars 190.69 million; segment-level year-over-year growth rates were not disclosed in the last report.

Current Quarter Outlook (with major analytical insights)

Discovery and Safety Assessment

Discovery and Safety Assessment is the company’s anchor revenue contributor and the focus of operational execution this quarter. Management initiatives to secure and optimize critical inputs and workflows are likely to influence both capacity utilization and margin performance. On January 12, 2026, Charles River Laboratories announced an agreement to acquire K.F. (Cambodia) Ltd for approximately US dollars 510.00 million, a strategic move aimed at strengthening a key part of the supply chain for nonhuman primate inputs used in safety assessment. Aligning ownership and oversight over this sensitive supply chain supports tighter cost control, compliance, and operational reliability, potentially reducing procurement volatility and benefiting margins.

Sequentially, the segment is primed to convert backlog into delivery as biopharma sponsors progress programs that require preclinical safety packages. While program start cadence can vary by sponsor funding and pipeline prioritization, the operational read-through of supply-chain reinforcement suggests lower disruption risk in core DSA workflows. From a financial standpoint, the forecasted decline in EBIT and adjusted EPS for the total company (-7.30% and -7.44% year-over-year, respectively) implies margin sensitivity; within DSA, mix of studies and timing of completions will be crucial for translating revenue into earnings. If execution benefits from the acquisition and integration plan begin to manifest, it could provide incremental support to gross profit, even as the revenue forecast for the quarter remains essentially flat year-over-year at the consolidated level.

Manufacturing and Cell and Gene Therapy-Related Services

Manufacturing generated US dollars 190.69 million last quarter and is a complementary pillar that includes specialized services aligned with advanced modalities. On January 21, 2026, the company entered into a gene therapy contract development and manufacturing organization collaboration with the Gazi University Faculty of Medicine in Turkey, under which Charles River will supply plasmid DNA for adeno-associated virus production and in vitro efficacy studies. While the financial terms were not disclosed, this collaboration underscores the company’s engagement in enabling production components for cell and gene therapy programs.

This quarter’s outlook for Manufacturing is centered on measured expansion of capacity and capabilities alongside disciplined cost management. Plasmid DNA supply and associated technical support could open incremental opportunities in development-phase engagements, broadening the relationship base and potentially creating downstream manufacturing flow-through if sponsors advance to later stages. The revenue contribution from such collaborations may be modest in the near term, but the strategic value lies in reinforcing Charles River Laboratories as an integrated partner across development and manufacturing steps, with targeted participation in high-growth modalities. The segment’s performance will depend on conversion of pipeline discussions into active scopes, along with timely delivery and regulatory-compliant execution.

Key Stock Price Drivers This Quarter

The primary valuation drivers for this print are revenue delivery versus the US dollars 987.00 million forecast, segment mix, and margin translation into adjusted EPS around US dollars 2.34. Given the company’s prior quarter gross margin of 35.04% and net margin of 5.42%, investors will parse gross-to-operating leverage progression, with scrutiny on cost of services and operating expense controls relative to study mix. The company-level EBIT forecast at US dollars 180.40 million (year-over-year -7.30%) and adjusted EPS (year-over-year -7.44%) frame expectations for bottom-line compression, making operational efficiency and pricing discipline central to the narrative. Any tangible early benefits from the K.F. (Cambodia) Ltd acquisition in procurement and logistics, even if initial, may signal a path to margin stabilization over the coming quarters.

Additionally, announcements such as the January 21, 2026 collaboration with Gazi University serve as leading indicators of demand alignment in advanced therapy programs, but the quarter’s reported numbers will hinge more on ongoing contracts and already scheduled studies. Investors are particularly sensitive to how Discovery and Safety Assessment utilization trends and cycle times convert into consolidated earnings given the relatively flat year-over-year revenue forecast. Management color on backlog, study starts, and program completions will provide context for the coming quarters, where the revenue trajectory can be influenced by the balance between preclinical demand and the company’s own capacity and cost initiatives.

Analyst Opinions

The majority view among recently published institutional commentary is bullish. On January 21, 2026, Jefferies maintained a Buy rating and raised its price target to US dollars 255.00, citing improved confidence in the company’s multi-quarter execution pathway and alignment of operational initiatives with margin normalization. On January 16, 2026, Citigroup reiterated a Buy rating and lifted its price target to US dollars 265.00, pointing to the company’s leveragable scale in its core businesses and strategic steps that support long-term competitiveness. On January 13, 2026, Baird kept an Outperform rating and adjusted its price target to US dollars 231.00, reflecting expectations that incremental operating improvements and segment execution can mitigate the near-term earnings compression reflected in consensus forecasts. Complementing these views, FactSet’s aggregated stance referenced on January 21, 2026 indicated an average rating of overweight and a mean price target of US dollars 216.21.

Collectively, these opinions frame consensus around stable to modestly improving operational performance amid a transitional quarter for earnings, with emphasis on the quality of execution within Discovery and Safety Assessment and discipline in manufacturing-related services. The bullish majority is grounded in the perspective that Charles River Laboratories has a track record of operational responses to supply chain and program timing challenges, and that recent actions—such as the planned acquisition of K.F. (Cambodia) Ltd announced on January 12, 2026 and the collaboration with Gazi University on January 21, 2026—support both reliability and capability expansion. Analysts also highlight that, despite a forecasted decline in adjusted EPS and EBIT, the company’s path to margin stabilization could be supported by mix management, cost controls, and targeted investments that improve throughput and compliance.

In terms of this quarter’s setup, the bullish camp expects the reported revenue near US dollars 987.00 million to remain in a narrow band around consensus and for any upside to emerge from disciplined execution rather than broad-based demand acceleration. A key element in their constructive stance is the confidence that operational steps taken in recent months reduce execution risk in critical workflows, enabling better conversion of revenue into earnings over subsequent quarters. They will look for management commentary to substantiate early signs of margin support from procurement and logistics changes, and for clarity on the timing of contributions from the new gene therapy-related collaboration. All told, the dominant institutional view is that Charles River Laboratories can navigate a muted revenue growth quarter while laying groundwork for improved profitability later in the year, contingent on consistent delivery against its operational actions and a steady backdrop of sponsor activity across its core service lines.