Is This the Right Time to Add CRL Stock to Your Portfolio?

Charles River Laboratories International, Inc. CRL is well-poised to grow in the coming quarters owing to its strong research-model position, improving demand trends and flexible vivarium solutions. The company is streamlining its portfolio while expanding capacity in areas of strong demand. The Discovery and Safety Assessment (“DSA”) segment is also showing improving demand, bookings and backlog, supporting its growth prospects. Yet mixed demand trends and NHP-related cost volatility remain key risks. 

Over the past year, this Zacks Rank #2 (Buy) stock has surged 79% compared with the industry’s 11.2% rise and the S&P 500 composite’s 22.2% growth.

The renowned, non-clinical global drug development company has a market capitalization of $13.92 billion. Charles River has an earnings yield of 3.9%. The company surpassed earnings estimates in each of the trailing four quarters, delivering an average surprise of 5.9%.

Let’s delve deeper.

Upsides for CRL Stock

Strategic Deals Drive Growth: Charles River has completed the divestitures of its Contract Development and Manufacturing Organization and Cell Solutions businesses and certain European Discovery Services sites, sharpening the portfolio around regulated testing and manufacturing quality-control capabilities. At the same time, the company is investing in areas where client demand remains strong. It has five lab-science expansions under way globally, including new bioanalytical capacity at Heriot-Watt University’s Research Park in Scotland. Management noted that lab-science demand has increased over the past five years, supported by large-molecule bioanalysis, biomarkers and added testing requirements across regulated, nonregulated and clinical-development programs.

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RMS’ Prospects Seem Bright: Charles River continues to hold a leading position in research models, supported by a broad product and service offering. In the second quarter of 2026, RMS organic revenues declined 1.4%, an improvement from the 5.5% decrease in the first quarter as NHP shipment timing normalized. Lower small-model demand in North America and softer research model services were partly offset by continued demand from mid-tier biotech and Clinical Research Organization clients in China. The Charles River Accelerator and Development Lab model continues to offer clients flexible vivarium capacity without requiring internal infrastructure, preserving a capital-efficient value proposition as clients manage research spending.

DSA, A Potential Growth Driver: Charles River remains a leading provider of outsourced discovery, non-clinical development and regulated safety testing services. In the second quarter of 2026, DSA organic revenues increased 0.2%, its first organic growth since the third quarter of 2023. Net bookings rose 12.6% sequentially to $701 million, backlog increased to $1.97 billion, and net book-to-bill reached 1.19X, marking the third consecutive quarter above 1X and the highest level in nearly four years. The improvement was broad-based across global biopharma and small and midsized biotech clients.

The Cambodia and Mauritius NHP supply assets also support availability for complex biologics work, while lower Cambodian sourcing costs are expected to begin benefiting DSA margins in the third quarter and contribute more in the fourth quarter.

What Ails Charles River?

Uneven Demand Recovery: Charles River’s demand environment is recovering, but the pace remains uneven across client groups and end markets. In the second quarter of 2026, small and midsized biotech revenues were essentially flat organically, while global biopharma revenues increased organically. Management continues to expect a low-to-mid-single-digit organic revenue decline in RMS for 2026 because North American research-model volumes are lower, and academic and government customers face flat NIH budgets and slower grant processing. DSA trends are better, but the recovery is gradual and uneven.

NHP Supply and Cost Variability: Charles River’s safety assessment and large-model activities remain exposed to variability in NHP sourcing, study mix and study-start costs. In the second quarter of 2026, DSA adjusted operating margin fell 180 basis points year over year to 25.6%, primarily because of higher study-related direct costs, even as NHP shipment timing normalized in RMS. The Cambodia acquisition may not fully eliminate sensitivity to NHP availability, utilization and study timing. The acquired supplier also adds integration requirements. Because NHP-related work carries attractive economics, changes in model costs or study mix can still create quarter-to-quarter variability in margins and earnings.

CRL Stock Estimate Trend

The Zacks Consensus Estimate for CRL’s 2026 earnings has increased 2.3% to $11.30 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $3.90 billion, suggesting a 2.9% decrease from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Veracyte VCYT, Globus Medical GMED and Teleflex TFX.

Veracyte has an earnings yield of 4.5% against the industry’s negative 1.3% yield. Shares of the company have risen 43.4% compared to the industry’s 3% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%. 

VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Globus Medical, carrying a Zacks Rank #2, has an earnings yield of 6% compared to the industry’s negative 1.3% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 35.8% against the industry’s 3% decline over the past year.

Teleflex, carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 12.9% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX shares have rallied 11.9% against the industry’s 3% decline over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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