IQV Update ($127)

One year ago we concluded: "the stock is around fair value, however given the widening moat, the defensiveness of the business, plus the potential for acceleration, it is attractive."

After H1 2018 acceleration in bookings  we see clear evidence that the strategy is working in clinical trials (~50% of profits) and acceleration of revenue is getting closer. We expect next 12-month backlog conversion numbers (disclosed Qtly) to start improving from Q3 (est 1/11/18), providing a catalyst for upward revisions to conservative 2019 and 2020 consensus estimates.

Growth improvement in Technology business over last year has been supported by aggressive M&A, although organic growth remains muted. However, a number of new product introductions and partnerships make us more optimistic. We believe IQV’s Tech business is in the right space at right time with access to customers, positioning it well for future.

The magnitude of the acceleration still remains difficult to predict, but given the increasing evidence of that acceleration, and high quality, with limited downside, we think IQV remains an attractive bet. 

Link to original report and basics on IQV's business. 

Link to Update