Market Overview

KeyBanc: Iqvia Holdings' Valuation Might Be Overheated

KeyBanc: Iqvia Holdings' Valuation Might Be Overheated

Iqvia Holdings Inc (NYSE: Q), formerly known as Quintiles, merged with IMS Health last year to combine its data assets and tools to better compete in the post-Cures Act environment.

The Analyst

KeyBanc Capital Markets' Donald Hooker downgraded Iqvia's stock rating from Overweight to Sector Weight with no assigned price target. Keybanc's previous price target was $100.

The Thesis

Iqvia's business model is differentiated and well-positioned to operate in the market at a time when there is a "concerted effort" by regulatory bodies across the world to improve the drug development process, Hooker said in the downgrade note. (See Hooker's track record here.) 

Iqvia is able to combine the data assets of the legacy IMS Health business to improve the clinical trial feasibility analysis during the RFP process, the analyst said. 

Looking forward, the company should be able to demonstrate a consolidated organic revenue growth profile of 6 to 7 percent and grow its EBITDA by 9 to 10 percent in both 2018 and 2019, Hooker said. The stock is trading at 14x 2018 EBITDA, which not only represents a premium to the group average of 12.8x, but also assumes a 25 percent multiple expansion this year, the analyst said. 

Iqvia's balance leverage of 3.8x (net debt-to-R4Q EBITDA) is above the average debt ratio of other publicly traded CROs of 1.8x, Hooker said. 

Price Action

Shares of Iqvia have gained 36 percent since the start of 2017 and 145 percent over the past five years.

Related Links:

Exclusive: DelMar Pharma CEO Sheds Light On Glioblastoma, And How Its Drug Could Help Sen. John McCain

Exclusive: Egalet CEO Talks Drug Approvals, 21st Century Cures Act And Winning The War On Opioid Abuse

Latest Ratings for Q

Nov 2017KeyBancDowngradesOverweightSector Weight
Nov 2017Morgan StanleyMaintainsOverweight
Nov 2017MizuhoDowngradesBuyNeutral

View More Analyst Ratings for Q
View the Latest Analyst Ratings


Related Articles (Q)

View Comments and Join the Discussion!

Posted-In: Donald Hooker drugs IMS Health KeyBanc Capital Markets QuntilesAnalyst Color Downgrades Analyst Ratings Best of Benzinga

Latest Ratings

MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at