Charles River Laboratories International (CRL) Stock Could Be 41% Undervalued After Lilly Tie Up And Upgrade

Charles River Laboratories International stock reacts to new AI drug discovery collaboration

Charles River Laboratories International (CRL) is back in focus after a Morgan Stanley upgrade and a new collaboration with Eli Lilly's AI and machine learning drug discovery platform, TuneLab.

See our latest analysis for Charles River Laboratories International.

The recent Morgan Stanley upgrade and the Lilly TuneLab collaboration arrive as momentum in Charles River Laboratories International’s share price has picked up, with a 30-day share price return of 15.41% and a 90-day share price return of 17.09%, while the 1-year total shareholder return of 25.47% contrasts with weaker 3 and 5 year total shareholder returns.

If AI in drug discovery interests you, this is also a good moment to scan the wider opportunity set using the 40 healthcare AI stocks

With Charles River Laboratories International stock up over the past year, but 3- and 5-year returns still weaker and the shares trading below the average analyst price target, is this renewed AI and biotech interest a buying opportunity or already pricing in future growth?

Most Popular Narrative: 41% Undervalued

Charles River Laboratories International last closed at $185, while the most followed narrative pegs fair value at $313.61. This creates a wide gap that catches the eye.

The acquisition of K.F. (Cambodia) by Charles River Laboratories in January 2026 is more than just another corporate transaction. It reflects a deeper reality within the drug development ecosystem.

Read the complete narrative.

Want to see why this narrative supports a much higher fair value? It relies on rising margins, accelerating earnings and a future profit multiple usually reserved for market leaders. Curious which specific long term assumptions make $313.61 the anchor price?

Result: Fair Value of $313.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this narrative still faces real risks, including any setback to the K.F. acquisition or tighter primate regulations that could constrain Charles River Laboratories International’s research capacity.

Find out about the key risks to this Charles River Laboratories International narrative.

Another view on Charles River Laboratories International valuation

While the community narrative points to a fair value of $313.61 and labels Charles River Laboratories International as undervalued, the SWS DCF model tells a very different story, with a future cash flow value of $76.70, implying the current $185 price is overvalued instead.

When two methods pull in opposite directions like this, it raises a simple question for you as an investor: do you trust the cash flow math more, or the long term story behind the higher fair value?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Charles River Laboratories International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 45 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With Charles River Laboratories International pulling investors in different directions on risk, reward and valuation, it makes sense to move quickly and weigh the evidence yourself by reviewing the 2 key rewards and 1 important warning sign

Looking for more investment ideas beyond Charles River Laboratories International?

If you stop with Charles River Laboratories International, you could miss other compelling setups, so keep building your watchlist and let the data do the heavy lifting.

• Spot potential upside early by scanning 45 high quality undervalued stocks that combine solid fundamentals with prices that may not fully reflect their underlying business strength.
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• Get ahead of the crowd by searching the screener containing 19 high quality undiscovered gems and see which quieter opportunities could deserve a place on your radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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