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On Monday, Truist Securities expressed continued confidence in ICON plc (NASDAQ:ICLR), maintaining a Buy rating and a price target of $262.00. The stock, currently trading at $183.16, is near its 52-week low of $179.50, while InvestingPro analysis suggests the stock is undervalued with strong fundamentals and a "GREAT" financial health score. The endorsement comes despite news of a delay in a significant next-generation COVID vaccine study being managed by the company. Truist Securities analyst Jailendra Singh updated their financial model to account for the postponement, which is now expected to set the study back by approximately 90 days, with a resumption anticipated later in the second quarter of 2025.
ICON plc, a global provider of drug development and clinical research services to pharmaceutical, biotechnology, and medical device industries, had previously reported during their fourth-quarter 2024 earnings call that the vaccine trial was actively screening participants and progressing as planned. However, the recent delay announced by the sponsor has led to adjustments in the company’s timeline.
Singh from Truist Securities stated, "We caught up with ICON Plc following its announcement that one large-scale next-gen COVID vaccine study has now also been delayed by the sponsor." He further elaborated on the impact of this development, "Based on current information, the study is indicating a delay of 90 days, suggesting that the study will re-commence late in 2Q25."
Despite the setback, Truist Securities’ stance on ICON remains unchanged. Singh confirmed, "We are updating our model to reflect this shift. We are maintaining our Buy rating with a $262 PT." The affirmation of the Buy rating and the price target indicates Truist Securities’ belief in ICON’s long-term prospects and its ability to navigate through the temporary challenges posed by the study’s delay. With $8.28 billion in revenue over the last twelve months and a P/E ratio of 19.24x, ICON maintains strong fundamentals. Discover more insights about ICON’s valuation and growth potential with a comprehensive InvestingPro Research Report, part of our coverage of 1,400+ top US stocks.
In other recent news, ICON plc has reported a successful fourth quarter of 2024, surpassing analysts’ expectations with earnings per share of $3.43, slightly above the forecast of $3.42. Revenue for the quarter reached $2.04 billion, exceeding predictions by $10 million, despite a 1.2% year-on-year decrease. ICON’s management reiterated its full-year guidance for 2025, though they anticipate lower margins and free cash flow due to unbilled revenue. Meanwhile, Evercore ISI maintained its Outperform rating on ICON with a price target of $225, despite a delay in a large-scale COVID vaccine study that is expected to impact first-half 2025 revenue by 1-2%, translating to a financial impact of $40-80 million. Leerink Partners also maintained an Outperform rating but adjusted its price target to $235 from $243, citing additional market-driven challenges due to the vaccine trial delay. Despite these setbacks, ICON’s management remains optimistic about long-term growth, bolstered by strategic partnerships and a focus on digital innovation. Investors are closely monitoring these developments as ICON navigates the current market dynamics.
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