Why IQVIA and Charles River Are Now Buy-Rated Amid a Strong CRO Sector Outlook

The contract research organization (CRO) sector has emerged as a standout performer in the life sciences industry, driven by surging demand for outsourced drug development services. Two of the sector's most prominent players, IQVIA Holdings (IQV) and Charles River Laboratories (CRL), have recently attracted significant analyst attention, with strategic upgrades and robust performance metrics reinforcing their buy ratings. This analysis explores the catalysts behind their current valuations and the broader tailwinds propelling the CRO industry.

IQVIA: A Case of Resilient Growth and Analyst Confidence

IQVIA's Q2 2025 results underscored its dominance in the CRO space. The company reported non-GAAP earnings per share (EPS) of $2.81, surpassing estimates by $0.04, and revenue of $4.02 billion, exceeding forecasts by $60 million. These figures reflect the strength of IQVIA's diversified offerings, particularly its Research & Development and Technology & Analytics segments, which leverage its proprietary “Human Data Science” platform to streamline clinical trials and drug commercialization.

Analyst sentiment has aligned with this performance. On September 9, 2025, Jefferies upgraded IQVIA from “Hold” to “Buy,” raising its price target to $225.00 from $195.00—a 15.38% increase. This move followed similar upgrades from Mizuho and UBS, both of which raised their price targets to $225.00. The firm's average 12-month target price now stands at $229.86, reflecting a consensus of optimism. Analysts cite IQVIA's strong backlog of R&D solutions, its ability to capitalize on outsourcing trends, and the scalability of its data-driven services as key growth drivers.

Charles River: Strategic Momentum and Conservative Guidance

Charles River Laboratories has also seen a surge in analyst confidence, driven by improved Discovery and Safety Assessment (DSA) bookings. In Q1 2025, DSA bookings rose 22% year-over-year, a trend that continued into Q2. Jefferies upgraded CRL from “Hold” to “Buy” on September 9, 2025, raising its price target to $195.00 from $142.00. The firm highlighted CRL's conservative second-half 2025 guidance, suggesting revenue could exceed consensus estimates. Additionally, potential value creation through the sale of part or all of CRL's Manufacturing Solutions segment—amid strategic reviews and activist investor interest—adds to its appeal.

CRL's expertise in preclinical research, particularly in oncology, rare diseases, and cell and gene therapy, positions it to benefit from the sector's shift toward complex trials. Its recent expansions and collaborations further solidify its market position, aligning with the broader CRO industry's focus on innovation.

Sector-Wide Tailwinds: A Booming Market for Outsourced R&D

The CRO sector's growth is underpinned by structural trends. The global CRO market is projected to expand at a compound annual growth rate (CAGR) of over 6.5% from 2026 to 2033, driven by rising R&D expenditures, the complexity of clinical trials, and the adoption of AI and data analytics. In North America, the CRO market is expected to grow at a CAGR of 1.3% through 2025, with a sharper acceleration to 9.62% from 2025 to 2030.

IQVIA and Charles River are well-positioned to capitalize on these dynamics. IQVIA's historical revenue growth—7.56% CAGR from 2018 to 2023—demonstrates its ability to scale amid industry shifts. Meanwhile, CRL's focus on preclinical innovation aligns with the sector's demand for early-stage drug discovery solutions.

Conclusion: Buy Ratings Justified by Fundamentals and Analyst Consensus

The recent analyst upgrades for IQVIA and Charles River are not isolated events but rather reflections of their strong operational performance and alignment with industry tailwinds. With IQVIA's data-driven solutions and CRL's preclinical expertise, both companies are poised to outperform in a sector experiencing sustained demand. For investors, the combination of robust earnings, strategic upgrades, and a favorable market outlook makes these CROs compelling buy candidates.