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On Tuesday, Citi analysts made a positive adjustment to Laboratory Corporation of America’s (NYSE:LH) stock, upgrading it from Neutral to Buy and raising the price target to $300 from the previous $250. The upgrade comes amid strong utilization rates in the Labs industry, which have persisted post-pandemic with no signs of a slowdown. Laboratory Corporation of America, often referred to as LabCorp, is expected to continue benefiting from this trend through its core diagnostics business. Currently trading at $254.04, the stock shows strong momentum with a 17.4% return over the past year and maintains a "GOOD" Financial Health Score according to InvestingPro data.[Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis for LabCorp on InvestingPro]
The recent acquisition of Invitae (OTC:NVTAQ) by LabCorp is anticipated to be dilutive to margins entering fiscal year 2025. However, Citi analysts forecast a clear path to breakeven and potential accretion in the future. This acquisition is part of LabCorp’s strategic efforts to expand its offerings and strengthen its position in the market.
Furthermore, LabCorp’s Early Development business has faced multiple quarters of headwinds, but a gradual recovery appears to be on the horizon. This expected improvement may alleviate some of the negative sentiment that has been weighing on the company’s stock.
Citi’s analysts believe that LabCorp is well-positioned to capitalize on the current industry dynamics. The company’s ability to navigate through the dilutive impact of its recent acquisition and the anticipated recovery in its Early Development business has led to the upgraded rating and increased price target.
LabCorp’s stock is set to potentially benefit from these developments, as the upgraded rating and higher price target reflect a more optimistic outlook from Citi analysts on the company’s financial performance and market position.
In other recent news, Immutep (NASDAQ:IMMP) Limited disclosed its half-year financial results in a filing with the U.S. Securities and Exchange Commission. While specific financial details were not highlighted, the full report includes comprehensive information on revenue, expenses, and profit margins, providing investors insights into the company’s financial performance over the past six months. Meanwhile, Labcorp has introduced Labcorp Plasma Complete, a liquid biopsy test aimed at advanced cancer care, which offers comprehensive genomic profiling and is now available for clinical use. This development enhances Labcorp’s oncology portfolio and supports personalized patient care.
Additionally, Labcorp has expanded its credit facility from $300 million to $700 million, reflecting its ongoing financial strategy. The amendment to the receivables purchase agreement includes new purchasers like The Toronto-Dominion Bank (TSX:TD) and MUFG Bank Ltd. On the analyst front, Truist Securities raised its price target for Labcorp to $285, maintaining a Buy rating, citing strong fourth-quarter performance and promising 2025 guidance. Similarly, Jefferies increased its price target for Labcorp to $290, also maintaining a Buy rating, highlighting robust financial results and strong free cash flow despite some margin impacts.
These updates reflect significant developments for both Immutep and Labcorp, with Immutep’s financial disclosures and Labcorp’s new product launch and financial maneuvers likely to influence investor decisions.
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