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Burlington, North Carolina-based Labcorp Holdings Inc. (LH) operates as a laboratory services company, providing information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make decisions. With a market cap of nearly $20 billion, the company operates through diagnostics laboratories (Dx) and biopharma laboratory services (BLS) segments. Labcorp is set to announce its fourth-quarter results before the markets open on Thursday, Feb. 6.
Ahead of the event, analysts expect LH to report a non-GAAP profit of $3.40 per share, up a modest 3% from $3.30 per share reported in the year-ago quarter. Furthermore, the company has surpassed Wall Street’s bottom-line projections in each of the past four quarters. Its adjusted EPS for the last reported quarter increased 3.6% year-over-year to $3.50, marginally exceeding analysts’ expectations.
For the full fiscal 2024, Labcorp is expected to deliver an adjusted EPS of $14.51, up 7% from $13.56 in fiscal 2023. While in fiscal 2025, its earnings are expected to surge 9.9% year-over-year to $15.95 per share.
LH stock has gained 7.9% over the past 52 weeks, outpacing the Healthcare Select Sector SPDR Fund’s (XLV) 2.2% returns while underperforming the S&P 500 Index’s ($SPX) 25% surge during the same time frame.
Labcorp Holdings’ stock prices soared 4.6% after the release of its better-than-expected Q3 results on Oct. 24. Driven by the solid momentum in its core business, the company reported a robust 7.4% year-over-year growth in revenues to $3.3 billion, exceeding analysts’ expectations. Meanwhile, the company also introduced new tests and carried out several transactions with health systems and regional laboratories, which aligns with the company’s acquisition strategy. During the quarter, Labcorp spent $115.8 million on CapEx and a net of $458.1 million on acquisitions demonstrating its approach towards growth.
Furthermore, the company observed a notable 4.1% year-over-year growth in adjusted operating income to $441.1 million.
The consensus opinion on LH stock is strongly bullish, with an overall “Strong Buy” rating. Out of the 16 analysts covering the stock, 12 recommend “Strong Buy” and four suggest a “Hold” rating. Its mean price target of $265.19 represents an 8.7% upside potential from current price levels.
