Truist raises Laboratory Corp price target to $285, maintains Buy

On Friday, Truist Securities updated its outlook on Laboratory Corporation of America (NYSE:LH), increasing the price target to $285 from the previous $275 while reaffirming a Buy rating on the company’s shares. The adjustment follows Laboratory Corp’s strong fourth-quarter performance and promising guidance for the year 2025. Currently trading at $245.67, the stock is approaching its 52-week high of $258.59, with analyst targets ranging from $232 to $293. According to InvestingPro analysis, the company appears to be trading above its Fair Value, though it maintains a strong financial health score of 2.8 out of 5.

The firm’s analysts highlighted the company’s robust core business momentum and the expected continued growth in the Diagnostics sector. The positive outlook is also supported by improvements in margin across both of Laboratory Corp’s segments and a steady flow of free cash, with the company generating over $1 billion in levered free cash flow over the last twelve months. These factors collectively contribute to the analysts’ bullish stance on the stock. InvestingPro data reveals the company maintains an attractive PEG ratio of 0.33, suggesting favorable valuation relative to its growth prospects.

Truist Securities also noted the successful progression of Laboratory Corp’s acquisition of Invitae (OTC:NVTAQ) and expressed optimism about the overall trends in the Business Leadership Series (BLS) and improvements in the Early Development segment. The company’s financial flexibility was recognized as a key element that could facilitate ongoing capital deployment and enhance shareholder value. With a healthy current ratio of 1.44 and projected revenue growth of 7% for FY2025, the company appears well-positioned for continued expansion.

The analysts anticipate that Laboratory Corp will have ample opportunities for both organic growth and mergers and acquisitions. The raised price target to $285 reflects these factors and the firm’s confidence in the company’s future performance.

Laboratory Corporation of America’s shares are expected to benefit from these positive assessments, as the company continues to execute its growth strategies and capitalizes on its strong market position.

In other recent news, Laboratory Corporation of America, commonly known as LabCorp, has been the subject of several significant developments. Analyst Tycho Peterson from Jefferies recently raised LabCorp’s stock price target to $290, maintaining a Buy rating. This adjustment followed the company’s fourth-quarter revenues and earnings per share (EPS), which exceeded expectations, and a strong free cash flow, despite slightly impacted margins.

In addition, LabCorp has expanded its credit facilities from $300 million to $700 million, providing the company with increased financial flexibility. This move suggests a proactive approach to managing the company’s capital structure.

Furthermore, Evercore ISI analysts upgraded LabCorp’s stock from an "In Line" rating to "Outperform," expressing a positive outlook on the company’s future earnings. They predict solid growth in base testing and improvements in various segments, expecting an EPS growth of 12% for 2025.

LabCorp also announced the commercial release of a new H5 bird flu molecular test in response to a multistate outbreak affecting poultry, dairy cows, and humans. This test, developed in collaboration with the U.S. Centers for Disease Control and Prevention (CDC), is part of an initiative to bolster public health preparedness and testing infrastructure.

Lastly, Jefferies initiated coverage on LabCorp, assigning the stock a Buy rating with a price target of $275. The firm highlighted LabCorp’s emergence from a period of significant challenges due to COVID-19 and the company’s shift in focus to more successful ventures, such as reference labs and esoteric testing. These are the recent developments regarding LabCorp.

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