The healthcare sector might be one of the dark horses, investment-wise, in 2024.
Trading.biz analyst Rahul Nambiampurath believes that IQVIA Holdings Inc. (IQV) is one of the more credible and bullish players in the space, powered by the increasing popularity of the CRO or Contract Research Organization space.
“The CRO industry is critical to the broader healthcare sector, particularly within clinical research and development. CROs are instrumental in the drug development pipeline, supporting companies from early-stage clinical trials to post-market surveillance,” mentions Rahul.
Also, IQVIA has positioned itself as a leader in the space with access to the following:
- Data analytics, courtesy of the human data science cloud
- Clinical research services
- Strategic consulting and advisory
Are the financial aligned with the bullish vibes?
Yes, the Q1 2024 financials, released on May 2, are highly optimistic. Here are a few crucial findings:
- Revenue: $3.737 billion, a 2.3% increase year-over-year.
- GAAP Net Income: $288 million.
- Adjusted EBITDA: $862 million, up 1.3% from the previous year.
- GAAP Diluted Earnings per Share (EPS): $1.56.
- Adjusted Diluted EPS: $2.54.
The company also reported strong R&D Solutions quarterly bookings of $2.6 billion, with a book-to-bill ratio of 1.23x, highlighting growing demand and future growth potential. The R&D Solutions contracted backlog reached $30.1 billion, a 7.9% increase year-over-year, indicating a healthy pipeline of future work.
How are the technicals looking for IQV?
At first glance, the formation of lower lows can look alarming. However, Rahul has discovered some interesting elements, including the formation of the ascending broadening wedge. Even though IQV has breached the lower trendline, strong support exists at $205.
The RSI indicates weakening bearish momentum against the price action, courtesy of the hidden bullish divergence.
IQV daily chart: TradingView
In case the bullishness takes over, the next target for IQV could be $237. Post that, you can expect the price to go as high as $262. Based on Rahul’s analysis and Fibonacci-led projections, even $275 looks probable.
David Toung, the analyst at Argus Research, even predicts a 40% upside for IQV, which is currently trading at $272. Tongue’s target price of $300 even betters Rahul’s analysis up to $275, making IQV a decent mid-term investment pick.
