Leerink Partners Downgrades ICON plc (ICLR) to Market Perform

Leerink Partners analyst Michael Cherny downgraded ICON plc (NASDAQ: ICLR) from Outperform to Market Perform with a price target of $105.00.

The analyst comments "We are downgrading the shares of ICLR from Outperform to Market Perform and lowering our price target from $220 to $105. This is now based on ~7.5x CY26 EV/EBITDA vs. ~13x previously, with estimates also reduced as detailed below. We recognize that the multiple is below any historical trading range and may be overly penal relative to what the long-term opportunity remains for ICLR. We also note that the scope of the accounting review appears to be contained, although the murkiness of the path forward is still in place. But given this uncertainty, combined with ongoing pressures on cancellations and margins (both of which appear to be an industry challenge as well given reports quarter to date), we simply cannot pitch this stock despite the depressed valuation vs. historical levels. The holding pattern/ceiling will persist until financials are released and the debate on fundamental can resume. To be clear – our view of ICLR as a strong clinical trial partner remains in place, with numerous opportunities across its client base to drive value over time. The AI concerns, while prevalent, are likely overplayed relative to the strategic advancements ICLR and other CROs are investing in themselves. We also see ICLR, especially on this expected pullback, as having increasing strategic value assuming the accounting review is contained. We are simply stepping to the sidelines until we know more."

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 $133.14 yesterday.

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