Icon (ICLR – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Cherny from Leerink Partners reiterated a Buy rating on the stock and has a $235.00 price target.
Michael Cherny has given his Buy rating due to a combination of factors that highlight the potential for significant returns despite current market conditions. He notes that Icon’s shares are trading at a substantial discount compared to historical valuations, particularly when looking at the EV/EBITDA basis relative to the 2007-2009 recession. This suggests that the stock is undervalued and could offer a positive risk/reward balance in the long term.
Furthermore, Cherny conducted a hypothetical leveraged buyout analysis which indicated that even under conservative estimates, Icon could yield attractive returns. The analysis showed that with a potential takeout price, the returns could be in the low-20% range, and even with reduced revenue and EBITDA estimates, the returns could still be in the mid-teens. These insights, combined with the current trading discount compared to its five-year average, underpin Cherny’s optimistic outlook and Buy rating for Icon’s stock.
In another report released on April 14, Bank of America Securities also maintained a Buy rating on the stock with a $204.00 price target.
ICLR’s price has also changed dramatically for the past six months – from $294.870 to $145.165, which is a -50.77% drop .