On Wednesday, Jefferies adjusted its stance on IQVIA Holdings (NYSE:IQV) stock, shifting the rating from Buy to Hold and lowering the price target from $266.00 to $242.00. The modification follows observations of the company's recent performance trends.
A Jefferies representative highlighted that IQVIA's bookings increased by only approximately 0.5% in the first half of 2024, and that total trailing twelve months (TTM) bookings have seen a year-over-year decline for two consecutive quarters.
The analyst noted that a growing proportion of longer-duration studies, such as those in oncology, central nervous system (CNS), and rare diseases, have contributed to a slower burn rate.
This trend, combined with the sluggish pace of bookings, is expected to result in research and development services (R&DS) growth remaining in the mid-single digits percentage range for 2025. This forecast is below the high-single-digit percentage range that was previously implied by consensual estimates.
Further concerns were raised regarding IQVIA's data business, which is reportedly encountering heightened competition. Competitors such as Veeva Systems (NYSE:VEEV) Inc. and other firms like Symphony and Norstella are offering more rapid update times and access to data from challenging-to-reach sources, including specialty pharmacies and blocked drugs. These competitive pressures could impact IQVIA's market position.
The guidance provided by IQVIA suggests an acceleration in the second half of the year for their Technology & Analytics Solutions (TAS), but Jefferies remains cautious. The firm believes that despite a stronger performance in the second quarter, the projected acceleration appears ambitious.
IQVIA Holdings, a prominent provider of advanced analytics, technology solutions, and contract research services to the life sciences industry, will now be navigating these market conditions with a more conservative outlook from Jefferies.
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