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Icon PLC (ICLR) Surges 4.6%: Is This an Indication of Further Gains?

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Icon PLC (ICLR - Free Report) shares ended the last trading session 4.6% higher at $179.83. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 13.8% loss over the past four weeks.

ICON recorded a strong price increase on optimism surrounding its newly-announced acquisition of PRA Health Sciences for a total value of $12 billion. The transaction is expected to remain highly accretive delivering double-digit accretion in the first full year of completion of the deal and growing by more than 20% thereafter.

Further, ICON’s encouraging fourth-quarter 2020 financial results with adjusted earnings and revenues surpassing the Zacks Consensus Estimate by 3.84% and 1.2% respectively buoy optimism.

Price and Consensus

Price Consensus Chart for Icon PLC

This contract research organization is expected to post quarterly earnings of $1.93 per share in its upcoming report, which represents a year-over-year change of +13.5%. Revenues are expected to be $779.47 million, up 9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Icon PLC, the consensus EPS estimate for the quarter has been revised 6.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ICLR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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