Analyst Michael Cherny of Leerink Partners maintained a Buy rating on Icon, with a price target of $220.00.
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Michael Cherny has given his Buy rating due to a combination of factors that highlight Icon’s potential for growth despite current market concerns. He acknowledges that the recent negative stock reaction is largely due to worries about pricing and gross margins, which he believes are overstated relative to the company’s valuation. Cherny remains optimistic about the risk/reward profile and notes that the improved flow of gross awards and requests for proposals (RFPs) should help re-establish a stronger growth trajectory.
Additionally, Cherny points out that there were no negative surprises in the recent quarter, and the encouraging gross bookings wins and book-to-bill ratio are positive indicators. While he has concerns about margin trajectory, he emphasizes that these concerns have not worsened significantly and are not currently reflected in the valuation. Despite lowering the 12-month price target from $235 to $220 due to margin questions, Cherny sees potential for upside as margins improve, which could lead to higher multiples.
According to TipRanks, Cherny is a 4-star analyst with an average return of 5.2% and a 57.36% success rate. Cherny covers the Healthcare sector, focusing on stocks such as DENTSPLY SIRONA, Icon, and McKesson.