Laboratory Corporation of America Upgraded to Outperform on Strong Growth Outlook

Laboratory Corporation of America Holdings (NYSE: LH), commonly known as Labcorp, is a key player in the life sciences industry. The company provides a broad spectrum of diagnostic and drug development services. Labcorp's strategic collaborations, such as with the Tigerlily Foundation, aim to enhance clinical trial diversity, which may contribute to its favorable market outlook.

Over the past year, analysts have shown increased confidence in Labcorp's stock, with the consensus price target rising from $258.86 to $271. This positive shift aligns with the company's strong financial performance. In the fourth quarter of 2024, Labcorp reported a revenue increase to $3.33 billion from $3.03 billion the previous year. For the full year, revenue rose to $13.01 billion from $12.16 billion.

The stability in Labcorp's price target reflects analysts' confidence in its growth prospects. This is supported by the company's significant earnings improvements. In Q4 2024, diluted earnings per share (EPS) improved to $1.70 from a loss of $1.95 the previous year. The full-year diluted EPS also rose to $8.84 from $4.33, indicating strong financial health.

Labcorp's future outlook remains promising, with a 2025 revenue projection between $13.88 billion and $14.05 billion, reflecting a midpoint growth of 7.4%. The adjusted EPS is expected to range from $15.60 to $16.40, with a midpoint growth of 9.8%. This growth potential is further highlighted by Bank of America Securities analyst Derik de Bruin, who set a price target of $370 for Labcorp.

Investors should consider these financial metrics and market conditions when evaluating Labcorp's stock. The company's robust service offerings and strategic initiatives, combined with its strong financial performance, suggest potential for growth and value creation.

Laboratory Corporation of America Holdings (NYSE: LH), commonly known as Labcorp, is a key player in the life sciences industry. The company provides a broad spectrum of diagnostic and drug development services. Labcorp's strategic collaborations, such as with the Tigerlily Foundation, aim to enhance clinical trial diversity, which may contribute to its favorable market outlook.

Over the past year, analysts have shown increased confidence in Labcorp's stock, with the consensus price target rising from $258.86 to $271. This positive shift aligns with the company's strong financial performance. In the fourth quarter of 2024, Labcorp reported a revenue increase to $3.33 billion from $3.03 billion the previous year. For the full year, revenue rose to $13.01 billion from $12.16 billion.

The stability in Labcorp's price target reflects analysts' confidence in its growth prospects. This is supported by the company's significant earnings improvements. In Q4 2024, diluted earnings per share (EPS) improved to $1.70 from a loss of $1.95 the previous year. The full-year diluted EPS also rose to $8.84 from $4.33, indicating strong financial health.

Labcorp's future outlook remains promising, with a 2025 revenue projection between $13.88 billion and $14.05 billion, reflecting a midpoint growth of 7.4%. The adjusted EPS is expected to range from $15.60 to $16.40, with a midpoint growth of 9.8%. This growth potential is further highlighted by Bank of America Securities analyst Derik de Bruin, who set a price target of $370 for Labcorp.

Investors should consider these financial metrics and market conditions when evaluating Labcorp's stock. The company's robust service offerings and strategic initiatives, combined with its strong financial performance, suggest potential for growth and value creation.

Evercore ISI analysts upgraded Laboratory Corporation of America (NYSE:LH) to Outperform from In Line, raising the price target to $265 from $260. The upgrade reflects optimism about the company’s ability to deliver above-consensus EPS growth in 2025 and beyond, driven by robust base testing demand, margin expansion, and improvements in operations.

LabCorp’s core diagnostics business is expected to sustain 3%-4% organic volume growth even as overall healthcare utilization softens slightly in 2025. Recent data still indicates elevated utilization levels compared to pre-COVID trends, and while some slowdown is anticipated, testing demand is expected to remain solid. The company’s lab volume growth is projected to align with broader healthcare trends but at a steadier pace, given certain procedures, like orthopedics, require minimal lab testing.

Invitae, which posed a $0.37 per share drag in 2024, is anticipated to become slightly accretive in 2025, contributing $0.03 to annual EPS. The turnaround is driven by approximately 10% revenue growth and cost synergies, with the impact becoming EPS-neutral by the second quarter and accretive in the latter half of the year. Additionally, diagnostics margins are expected to expand by about 80 basis points, supported by ~4% core growth at a 35% contribution margin and offsetting approximately $45 million in one-time costs from weather, inflation, and labor expenses.

According to the analysts, LabCorp’s overall EPS growth in 2025 is likely to exceed the company’s long-term target range of 8.5%-11.5%, highlighting its strong operational trajectory.