UPDATE: JPMorgan Upgrades ICON plc (ICLR) to Overweight

September 27, 2021 3:55 AM EDT
Get Alerts ICLR Hot Sheet
Price: $277.58 --0%

Rating Summary:
    15 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 5 | Down: 16 | New: 31
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(Updated - September 27, 2021 4:50 AM EDT)

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)."

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 $283.04 yesterday.


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