IQVIA Holdings: Strong Buy Rating Despite R&D Challenges and Valuation Opportunities

Analyst Michael Cherny of Leerink Partners reiterated a Buy rating on IQVIA Holdings (IQV – Research Report), reducing the price target to $210.00.

Michael Cherny has given his Buy rating due to a combination of factors that highlight both current strengths and future potential for IQVIA Holdings. The company’s recent quarterly results exceeded expectations, particularly in the Research & Development Solutions (R&DS) revenue segment, which was a positive surprise. While there are some challenges in the conversion of the active request for proposal (RFP) pipeline, the overall market dynamics rather than company-specific issues seem to be the root cause. Management’s confidence in achieving the lower end of their guidance range, despite these challenges, adds a layer of reassurance.
Moreover, the Technology & Analytics Solutions (TAS) segment continues to perform strongly, with growth surpassing expectations and benefiting from pent-up demand. This segment is expected to provide important offsets to any challenges faced by R&DS, supporting overall growth and enterprise EBITDA targets. Cherny believes that the current valuation does not fully reflect the potential upside in R&DS, and given that Contract Research Organizations (CROs) are trading at a discount compared to historical levels, there is an appealing equity story for patient investors. Consequently, despite reducing the price target from $245 to $210, the Buy rating is reiterated.

In another report released yesterday, Truist Financial also maintained a Buy rating on the stock with a $209.00 price target.

IQV’s price has also changed moderately for the past six months – from $221.250 to $146.200, which is a -33.92% drop .