UPDATE: JPMorgan Upgrades ICON plc (ICLR) to Overweight
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JPMorgan analyst Tycho W. Peterson upgraded ICON plc (NASDAQ: ICLR) from Neutral to Overweight with a price target of $320.00 (from $230.00).
The analyst comments "Post close of the PRAH acquisition, ICLR is poised to capitalize on a growing CRO market behind its best in class scale (combined company is second largest CRO behind IQV), offering a broader service offering with a larger geographic footprint. Management has repeatedly called out the goal of becoming the #1 healthcare intelligence CRO, with a focus on innovative technology and data analysis (for example, using the Symphony platform to track patients remotely and collect real-world evidence). We view PRAH as a high quality asset with a proven track-record, and recent company commentary has suggested integration efforts have gone smoothly (i.e., not a high level of customer or staff attrition as a result of the deal). Furthermore, we see the financial outlook as compelling, as the company now expects LT revenue growth of +HSD, adj. EBITDA of +low teens, and adj. EPS of +mid-teens (including $150M of run-rate cost synergies to be fully realized four years post deal) with significant de-leveraging post deal (from 4.2x net debt/adj. EBITDA post deal to <2.5x by YE23). With that in mind, we update our model to reflect our new revenue and EBITDA assumptions and move to OW from N, with a DCF-derived Dec. 2022 PT of $320 (previously $230), implying 20x our pro forma 2023E EV/EBITDA (vs. current multiple of 18x and CROs of 21.3x)."
Shares of ICON plc closed at $283.04 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesJPMorgan, Definitive Agreement
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