Charles River Laboratories International, Inc. CRL is scheduled to report first-quarter 2026 results on May 7, before the market opens.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.39 surpassed the Zacks Consensus Estimate by 2.58%. Earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 11.43%.
Q1 Estimates for CRL
The Zacks Consensus Estimate for first-quarter revenues is pegged at $971.1 million, suggesting a 1.3% decline from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s EPS is projected to decrease 16.2% year over year in the first quarter, reaching $1.96.
Estimate Revision Trend Ahead of CRL’s Q1 Earnings
Estimates for Charles River’s first-quarter earnings have dropped 2.6% in the last 30 days.
Let’s briefly review the company’s performance leading up to this announcement.
CRL: Factors at Play
Research Models and Services (“RMS”)
The segment’s performance in the first quarter may have been affected by the similar headwinds that pressured revenues in the previous quarter, including lower non-human primate (NHP) revenues due to the timing of certain shipments. Charles River’s full-year 2026 guidance also assumes NHP revenues to be below the 2025 levels, representing a roughly 200-basis-point (bps) drag to the RMS growth rate.
Small research model sales volume in North America is likely to have declined, reflecting in-house research activity by large pharma and midsized biotech clients yet to fully rebound. Uncertainty surrounding NIH budgets may have weighed on revenues from academic and government accounts. However, small model pricing in North America and Europe may have contributed to the segment’s revenues.
CRADL occupancy levels are expected to have been constrained by subdued demand from early-stage biotech clients. This may have affected research model services’ revenues.
Our model estimates that Charles River’s RMS business revenues will decrease 1.5% in the first quarter of 2026.
Discovery and Safety Assessment (“DSA”)
Following a slowdown in the biotech funding environment in the first half of 2025, Charles River experienced softer demand trends from small and mid-sized biotech clients in the subsequent months. The funding environment reinvigorated in the second half of the year, including a record level of $28 billion in the fourth quarter. Biotech clients were the primary driver behind a sequential increase in the DSA net book-to-bill throughout the back half of the year — a trend that is likely to have continued in the first quarter of 2026.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
Charles River may have experienced a higher number of NHP study starts, potentially leading to higher NHP sourcing costs. In January, Charles River acquired certain assets of K.F. (Cambodia) Ltd. to further strengthen and secure the DSA supply chain. The addition is expected to generate operating margin improvement starting later this year through significant cost savings on NHP sourcing.
Meanwhile, the segment’s organic revenues in first-quarter 2026 are likely to have been impacted by reduced sales volume for discovery services and regulated safety assessment services.
Per our model estimate, Charles River’s DSA business revenues are expected to decline 2.2% year over year.
Manufacturing Solutions
The segment is expected to have benefited from the performance of its Microbial Solutions business, driven by strong demand across the manufacturing quality-control testing portfolio, share gains for the Endosafe endotoxin testing platform and higher sales of the Celsis microbial detection products. The Biologics Testing business may have contributed as well, having returned to growth in the fourth quarter following a period of lower sample volumes from several large clients caused by project delays and regulatory challenges.
However, growth in the quarter may have been impacted by a tough year-over-year comparison, stemming from the loss of one commercial cell therapy client whose revenues declined nearly $25 million in 2025. Charles River projected an approximately $10 million impact on first-quarter manufacturing revenues.
Our model estimates Manufacturing Solutions’ revenues will rise 9.2% in the first quarter of 2026.
On a broader macroeconomic level, Charles River is exposed to a difficult operating environment with geopolitical pressure disrupting economic activity, global supply chains and labor markets. The company is now subject to tariffs on imports from its major supplier countries, such as Vietnam, Mauritius and China. These are also expected to have weighed on the quarter’s bottom-line performance.
Earnings Whispers for CRL Stock
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates, which is the case here:
Earnings ESP: Charles River has an Earnings ESP of +0.30%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Charles River currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.
Other Key MedTech Picks
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
Agenus AGEN has an Earnings ESP of +7.69% and a Zacks Rank #1. The company is expected to release first-quarter 2026 results soon.
In the trailing four quarters, AGEN delivered an average surprise of 31.42%. The Zacks Consensus Estimate implies that the company’s first-quarter EPS will increase 289.3% from the year-ago quarter’s figure.
Royalty Pharma RPRX has an Earnings ESP of +2.05% and a Zacks Rank #2. The company is slated to release first-quarter 2026 results on May 6.
RPRX’s earnings beat estimates in each of the trailing four quarters, the average surprise being 6.47%. The Zacks Consensus Estimate suggests that the company’s first-quarter EPS will rise 15.1% from the year-ago reported figure.
Solventum Corp. SOLV has an Earnings ESP of +1.97% and a Zacks Rank #2. The company is slated to release first-quarter fiscal 2026 results on May 5.
SOLV’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.68%. The Zacks Consensus Estimate for the company’s first-quarter EPS calls for an increase of 0.8% from the year-ago quarter’s figure.
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This article originally published on Zacks Investment Research (zacks.com).