Labcorp’s Q3 Results Exceed Estimates; Shares Gain 1.7%

Shares of life sciences firm Laboratory Corporation of America Holdings (LH) rose 1.7% on Thursday to close at $285.23 after the company’s third-quarter results exceeded analysts’ expectations.

Commonly known as Labcorp, the North Carolina-based company offers clinical laboratory and end-to-end drug development services. It operates one of the world’s largest clinical laboratory networks and has 36 primary laboratories in the U.S.

Adjusted earnings per share (EPS) during the quarter stood at $6.82, lower than the EPS of $8.41 reported in the third quarter of 2020 but above the Street’s estimate of $4.74.

Revenue increased 4.3% year-over-year to $4.06 billion and exceeded the consensus estimate of $3.64 billion. (See Insiders’ Hot Stocks on TipRanks)

While revenue for the Diagnostics segment declined 3.2% to $2.62 billion, revenue for the Drug Development segment rose 17.5% to $1.46 billion.

The Chairman and CEO of Labcorp, Adam Schechter, said, “Our Base Business continued to perform well and grew 14.6%. As a result of our third-quarter performance and improved outlook for the balance of the year, we are raising our full-year financial guidance.”

The company now expects adjusted EPS to be between $26 and $28, compared to the previously announced guidance range of $21.50 to $25.

Following the release of the third-quarter results, J.P. Morgan analyst Tycho Peterson maintained a Buy rating on the stock and raised the price target from $325 to $355 (24.5% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 7 unanimous Buys. The average Laboratory Corporation of America Holdings price target of $345.57 implies 21.2% upside potential. Shares have gained nearly 43% over the past year.

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