UPDATE: UBS Starts ICON plc (ICLR) at Buy

UBS analyst John Sourbeer initiates coverage on ICON plc (NASDAQ: ICLR) with a Buy rating and a price target of $270.00.

The analyst comments "We initiate coverage with a Buy rating and $270 PT (~30% upside potential from current levels). We believe ICLR presents an attractive HSD% revenue growth profile, margin expansion of ~250 bps driven by PRAH synergies and lower tax rate vs. peers, generating outsized earnings growth supported by our UBS Evidence Lab Surveys and Glassdoor tracker, expert calls and proprietary funding analysis. We believe valuation remains attractive, below the company's 5-year historical EV/EBITDA average not reflecting ICLR's revenue growth profile (we model an 8.5% 2023-2025E CAGR vs. 7.5% consensus) and we see further opportunity for EBITDA acceleration leading to multiple expansion. While we are monitoring biotech funding concerns, we note that emerging biotech exposure is ~mid-teens % of revenues, ICLR is selective in vetting biotech customers and clinical stage biotech is well funded. We believe share appreciation will be driven by better than expected progress on synergies (cost & revenue) and stabilization in biotech funding. Post PRAH, we believe the new ICLR is more diversified with well-rounded comprehensive capabilities to innovate and serve a wide range of clients. Net, we believe ICLR's experienced team will continue to execute well and outgrow the CRO industry."

For an analyst ratings summary and ratings history on ICON plc click here. For more ratings news on ICON plc click here.

Shares of ICON plc closed at $208.75 yesterday.

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