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On Wednesday, Mizuho (NYSE:MFG) Securities sustained its positive stance on Laboratory Corporation of America (NYSE:LH), commonly known as LabCorp, by maintaining an Outperform rating. The firm’s analyst, Ann Hynes, raised the price target on the stock to $274 from the previous $264. The adjustment reflects a confidence in the company’s earnings visibility despite a challenging macroeconomic environment. According to InvestingPro data, LabCorp, a $21 billion healthcare services provider, has seen its stock climb nearly 10% year-to-date, trading near its 52-week high of $258.59.
The new price target is based on a 17.1 times multiple of the anticipated 2025 adjusted earnings per share (EPS), which aligns closely with the clinical lab group’s 10-year trading high average multiple of 16.7 times. Hynes’ outlook for LabCorp remains optimistic, as she believes that the company’s earnings visibility is robust in the face of economic uncertainties. This optimism is supported by InvestingPro data showing seven analysts revising their earnings estimates upward for the upcoming period, with the company maintaining an attractive PEG ratio of 0.39, indicating good value relative to its growth prospects.
LabCorp’s financial performance appears to be resilient, with Mizuho reiterating its adjusted EPS estimates for both 2025 and 2026. The firm’s valuation method underscores the company’s consistent financial achievements and potential for continued growth within its sector. The company generated $13.2 billion in revenue over the last twelve months, demonstrating its significant market presence.
The endorsement by Mizuho suggests that LabCorp is well-positioned to navigate through the current economic headwinds, with an expected performance that could potentially outpace its peers. Investors may find reassurance in the company’s stable outlook and the analyst’s reaffirmed confidence in its financial prospects.
LabCorp’s stock price may respond to this updated price target and the maintained Outperform rating, as market participants digest the implications of Mizuho’s analysis. The company’s ability to maintain high earnings visibility in a difficult economic landscape could be a key factor for investors considering the stock.
In other recent news, Labcorp Holdings Inc. reported its Q1 2025 earnings, revealing a 5.3% year-over-year revenue increase to $3.3 billion, although it fell short of the projected $3.41 billion. The company achieved an adjusted EPS of $3.84, slightly surpassing the forecasted $3.78. Labcorp continues to target $100-$125 million in cost savings through its Launchpad initiative. Shareholders approved the 2025 Omnibus Incentive Plan and the Employee Stock Purchase Plan at the company’s Annual Meeting. These plans aim to provide stock-based compensation and allow employees to purchase common stock at a discount. Additionally, shareholders elected directors to the Board and ratified Deloitte & Touche LLP as the independent auditor for the fiscal year ending December 31, 2025. Labcorp’s recent product launches include LabCorp Plasma Complete and genetic risk panel tests, enhancing its offerings in high-growth areas like oncology. The company remains focused on maintaining a strong competitive position through strategic partnerships.
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