We recently published a list of 10 Best Beaten Down Stocks to Buy According to Analysts. In this article, we are going to take a look at where ICON Public Limited Company (NASDAQ:ICLR) stands against other best beaten down stocks to buy according to analysts.
JPMorgan released a market update where it highlighted the US Fed’s recent decision to keep the rates unchanged. Also, the US Fed decreased the growth forecasts and increased the near-term inflation expectations. The futures markets are pricing 2 interest rate cuts this year and a ~50% chance of the third cut. Jose Torres, Senior Economist at Interactive Brokers, believes that stocks are being impacted as slowdown worries continue to pressure the outlook for broader corporate earnings growth. According to him, investors continue to pile up shares in the defensive consumer staple, utilities, and healthcare segments and the real estate and energy areas.
What Lies Ahead as Q1 2025 Approaches its End?
Reuters reported that analysts have been turning more cautious about the US corporate earnings for Q1 2025, as Trump’s policies continue to threaten to trigger a global trade war that can impact the broader economic growth. Reuters, while quoting Tajinder Dhillon (senior research analyst at LSEG), noted that S&P 500 forecasts for Q1 2025 have declined by 4.5 percentage points since January 1. Notably, this has been the largest downward revision since Q4 2023.
The earnings growth for the S&P 500 companies is expected at 7.7% YoY, marking the lowest since Q3 2023 as well as a significant decline from 17.1% in Q4 2024. The worries related to the import tariffs and retaliation by US trade partners, together with the government cutbacks, can push the broader economy into recession have witnessed an increase over the past few weeks, reported Reuters.
CNBC, while quoting Scott Wren (senior global market strategist at the Wells Fargo Investment Institute), stated that numerous uncertainties can negatively impact the broader stock market, such as tariffs as well as a potential rebound in inflation. Furthermore, an increase in bond yields can also pose a headwind, as per Wren. Notably, increased yields can impact the demand for US stocks.
That being said, a favorable backdrop of healthy economic growth and consumer spending, together with relatively low unemployment, can help the S&P 500 to deliver ~12% in 2025. As per Wren, this would be marginally higher than the long-term historical average. The strategist thinks that the investors are required to be optimistic.
Amidst these trends, let us now have a look at the 10 Best Beaten Down Stocks to Buy According to Analysts.
Our Methodology
To list the 10 Best Beaten Down Stocks to Buy According to Analysts, we used a screener and shortlisted the stocks that are trading close to their respective 52-week lows and that analysts see significant upside to. Next, the stocks were arranged in ascending order of their average upside potential, as of March 21. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is ICON Public Limited Company (ICLR) The Best Beaten Down Stock to Buy According to Analysts?
A laboratory setting with a team of scientists working on a clinical trial.
ICON Public Limited Company (NASDAQ:ICLR) is a clinical research organization that is engaged in providing outsourced development and commercialization services. RBC Capital Markets has initiated coverage on the company’s stock, assigning an “Outperform” rating and setting a price objective of $263.00. The analysis hints at ICON Public Limited Company (NASDAQ:ICLR)’s significant role in supporting biopharmaceutical clients to expedite the drug market introduction via usage of its specialized data and technology capabilities, together with extensive global service offerings across the drug development process.
Michael Ryskin, an analyst from Bank of America Securities, maintained a “Buy” rating on the company’s stock. The analyst’s rating is backed by ICON Public Limited Company (NASDAQ:ICLR)’s robust competitive position and the relatively short-term nature of the headwinds it witnesses. Furthermore, the company’s strategic actions, including the stock buyback of $400 million in Q4 2024, reinforce the confidence in ICON Public Limited Company (NASDAQ:ICLR)’s long-term prospects, says Ryskin. The company’s cash management was robust in Q4 2024, resulting in the full-year FCF being in line with its targeted $1.1 billion.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“ICON Public Limited Company (NASDAQ:ICLR) is a leading contract research organization (CRO) that provides outsourced services to the biopharmaceutical industry. Shares fell on weak quarterly results and lowered 2024 guidance. Like other CROs, ICON is facing headwinds due to tighter management of R&D spend by pharmaceuticals, less biotechnology funding availability, a greater number of project delays and cancellations, and an industry shift in preferred business models from full to functional outsourcing. While we expect these headwinds will persist into at least the first half of 2025, we believe pharmaceutical R&D spend will continue to grow and global providers like ICON are well positioned to expand and gain share over time, returning to double-digit EPS growth. With the stock near all-time low valuations, we are holding.”
Overall, ICLR ranks 8th on our list of best beaten down stocks to buy according to analysts. While we acknowledge the potential of ICLR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than ICLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
