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On Monday, Jefferies, a global investment banking firm, raised the price target on shares of Laboratory Corporation of America (NYSE:LH) to $265.00 from the previous $245.00. The firm has maintained a Buy rating on the stock.
The adjustment reflects confidence in the company's core diagnostics business, which Jefferies believes is experiencing healthy volume growth not fully reflected in the stock's current valuation.
The research firm's statement highlighted the resilience of Laboratory Corp's core operations, suggesting that despite potential adjustments to third-quarter expectations, the current stock price may have already accounted for these changes.
Jefferies anticipates that the company's continued mergers and acquisitions (M&A) activity, along with positive developments in its Emergency Department (ED) business, will enable Laboratory Corp to meet its full-year guidance.
Laboratory Corp, a leading global life sciences company, is expected to leverage its M&A strategy and the growth in its ED business to bolster its performance. These factors are seen as key drivers that could lead to a rebound in the stock's performance later in the year, as per Jefferies' analysis.
The firm's commentary underscores a positive outlook on Laboratory Corp's ability to achieve its financial targets for the year. This outlook is based on the company's ongoing business activities and the expectation of a strong recovery in stock value in the latter part of the year.
The revised price target and maintained Buy rating by Jefferies serve as an indicator of the investment firm's confidence in Laboratory Corporation of America's market position and future prospects. The company's stock price is anticipated to reflect this positive sentiment as it continues to navigate through the year's financial quarters.
In other recent news, Laboratory Corporation of America saw a boost in its shares target by Baird, which retained an Outperform rating for the company stock. This adjustment reflects the recently finalized acquisition of Invitae (OTC:NVTAQ), expected to contribute approximately $120 million to Labcorp's revenue.
BofA Securities also raised its price target for Labcorp, maintaining a Buy rating and expecting the Invitae assets to become net accretive to earnings per share in 2025.
Labcorp reported robust growth in the second quarter of 2024, with revenues reaching $3.2 billion and adjusted earnings per share of $3.94. The company's diagnostics revenue grew by 8%, while biopharma laboratory services saw a 1% increase.
The company also announced plans to refinance $2 billion of debt maturing over the next 12 months and approved a $1 billion increase in its share repurchase authorization.
Meanwhile, Immutep (NASDAQ:IMMP) Ltd filed a preliminary financial report with the Securities and Exchange Commission (SEC), as part of regular disclosures to keep stakeholders informed about its financial health. The document outlines the company's financial status without providing detailed figures or outcomes. These are among the recent developments for both Labcorp and Immutep Ltd.
InvestingPro Insights
As Jefferies raises its price target for Laboratory Corporation of America (NYSE:LH), real-time data from InvestingPro aligns with the optimism surrounding the company's stock. Laboratory Corp's management has been actively buying back shares, signaling confidence in the company's value, a factor often appreciated by investors. This is coupled with a high shareholder yield, which can attract income-focused investors looking for companies with a track record of returning value to shareholders.
InvestingPro data shows that Laboratory Corp boasts a market capitalization of $18.66 billion, reflecting its significant presence in the healthcare industry. The company's P/E ratio stands at 41.76, indicating a high earnings multiple that suggests investors are expecting higher earnings growth in the future. This is further supported by the adjusted P/E ratio for the last twelve months as of Q2 2024, which is 23.31, presenting a more favorable valuation. Additionally, the company is trading near its 52-week high, priced at 93.19% of this peak, which could indicate a strong market belief in its continued performance.
On the financial front, Laboratory Corp has reported a revenue growth of 5.22% for the last twelve months as of Q2 2024, demonstrating steady top-line expansion. This growth is underpinned by a solid gross profit margin of 28.0%, illustrating the company's ability to maintain profitability amidst industry challenges.
For those seeking further insights, InvestingPro offers additional tips on Laboratory Corp, including expectations for net income growth this year and an analysis of the company's short-term obligations versus liquid assets. With these metrics and more, readers can explore a total of 9 InvestingPro Tips for a comprehensive understanding of the company's financial health and market position. For more detailed analysis and tips, visit https://www.investing.com/pro/LH.
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