PAREXEL International Corporation (PRXL) — This biopharmaceutical outsourcer, which provides contract research, consulting, marketing and IT services, has delivered consistent revenue and earnings gains over the past five years. This has been aided by key partnerships with companies like Pfizer Inc. (PFE), GlaxoSmithKline plc (ADR) (GSK) and Merck & Co., Inc. (MRK).
Operating margins have continued to improve since PAREXEL won the Pfizer contract in 2011. They have also benefitted from a restructuring program in June that included cutting 850 jobs.
Earnings for fiscal 2015, ended in June, rose 18% to $2.65 per diluted share, while sales increased 4% to $2.02 billion.
S&P Capital IQ estimates earnings will jump 21% in fiscal 2016 to $3.20 per share. And its analysts predict an 8% increase in revenue to $2.18 billion, with sales growth driven by more products moving out of the start-up phase. They have a “strong buy” rating on PRXL stock and a price target of $83.
PRXL stock is in a strong bull market with volatile price fluctuations that may allow traders to grab shares at a more favorable price. Since April, shares have consistently fluctuated between 15% and 18% from their highs to lows. Therefore, my buy under price of $66 is likely attainable if you are patient.
The current pattern is that of a huge ascending triangle with support at the 200-day moving average at $66 and resistance at $74.
Enter an open order to buy PRXL stock at $66 with a six-week trading target of $76 for a potential gain of 15%. Investors may also purchase shares as a long-term investment, targeting capital gains of 25% in 12 months.
