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- Jefferies downgraded contract research organization Inotiv (NASDAQ:NOTV) to hold from buy citing issues in sourcing non-human primates (NHP) and the resulting price increases for them.
- The firm also lowered its price target to $8 from $10 (~6% upside based on Wednesday's close).
- Shares are down 12% in Thursday morning trading.
- Analyst David Windley said that the Inotiv's (NOTV) revenue will be impacted by its inability to sell NHPs from Cambodia, though it does expect a resolution this year. However, the company said prices for NHP could rise 65%-100% this year.
- Jefferies is modeling 2023 revenue growth of 14%, though the current environment is softening for drug and safety assessments.
- Also, lower biotech funding is impacting demand for Inotiv's (NOTV) services, with Windley noting that the company is heavily exposed to smaller biotechs.
- Read why Seeking Alpha contributor argues that Gary Bourgeault says that Inotiv (NOTV) is a hold.