ICON plc (ICLR) PT Raised to $267 at Jefferies as Burn Rate Should Begin to Decline

Jefferies analyst David Windley raised the price target on ICON plc (NASDAQ: ICLR) to $267.00 (from $256.00) after the company reported $858M in revenue, +20% y/y, beating consensus by ~$78M. However, heavier passthroughs increased direct costs by 250 bps, leading to a gross margin miss. These plus other factors led to an 11c EPS beat. Management raised revenue guidance by $200M and EPS guidance by 30c at the mid point as well.

The analyst reiterated a Buy rating, stating "As with IQV, ICLR saw burn rate rise 70 bps sequentially to 8.8% in 1Q. Of the companies that have reported so far, the general trend in 1Q burn rate has been more positive for those with a higher proportion of COVID bookings in FY20. ICLR was in the upper half of the group with 20% + through 3Q (no disclosure in 4Q). For the balance of '21, revenue guidance suggests a 8.4-8.5% burn rate."

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