KeyBanc analyst Paul Knight downgraded Catalent to Sector Weight from Overweight without a price target. As COVID-19 demand wanes and revenue declines, Catalent must maintain fiscal 2024 EBITDA margins of 26.4% relative to 26.6% fiscal 2022 margins, Knight tells investors in a research note. Meanwhile, the $475M in October financing of the Metric acquisition with short-term debt in a rising interest rate environment increases the company’s interest cost, adds the analyst. Knight says that while growth in biologics will drive resumed sales growth and margin expansion, Catalent’s visibility appears limited until mid-2023.
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