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On Jun 14, we issued an updated research report on LabCorp (LH - Free Report) . The stock carries a Zacks Rank #2 (Buy).
This Burlington, NC-based healthcare diagnostics company, providing comprehensive clinical laboratory services and an end-to-end drug development support, has been grappling with multiple issues of late. Economic uncertainties including a challenging volume environment for testing laboratories and softness in utilization are headwinds for LabCorp.
Over the past three months, shares of LabCorp have climbed 7.5% against the industry’s 4.1% decline.
In first-quarter 2019, the company reported a strong underlying performance and organic revenue growth across both Diagnostics and Drug Development businesses, banking on a solid execution of three fundamental strategies, which are delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve the patient care.
During the quarter under review, Diagnostics business grew organically in terms of both revenues and volumes despite additional price reductions due to PAMA and the loss of exclusivity in two of the company’s largest managed care contracts. Revenues from all aspects of companion diagnostics surged more than 30% across the enterprise in the first quarter.
Covance Drug Development also rose organically despite an adverse impact of the foreign currency translation. During the reported quarter, the company enhanced Covance's offerings through strategic acquisitions like MI Bioresearch that bring about specialized preclinical capabilities in cell and gene therapy plus oncology testing.
In April, the company announced an innovative business swap transaction with Envigo. This strategic move provides Covance with enhanced global non-clinical research capabilities while maintaining access to bigger research models and services through a multi-year renewable supply agreement. This apart, the Covance LaunchPad initiative is well on track to deliver $150 million of net savings by the end of 2020.
On the flip side, the current economic volatility comprising a tough volume environment for the testing laboratories and utilization weaknesses are looming downsides for the company. This apart, the disposition of certain businesses and the implementation of the Protecting Access to Medicare Act (PAMA) dented growth. Moreover, an unfavorable currency movement persists as a major woe. The company also expects 2019 to continue witnessing similar hurdles.
Cerner’s long-term earnings growth rate is expected to be 13.5%.
Penumbra’s long-term earnings growth rate is projected at 21.5%.
Bruker’s long-term earnings growth rate is estimated at 11.7%.
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Image: Bigstock
LabCorp Diagnostics Shows Robust Growth Amid Price Declines
On Jun 14, we issued an updated research report on LabCorp (LH - Free Report) . The stock carries a Zacks Rank #2 (Buy).
This Burlington, NC-based healthcare diagnostics company, providing comprehensive clinical laboratory services and an end-to-end drug development support, has been grappling with multiple issues of late. Economic uncertainties including a challenging volume environment for testing laboratories and softness in utilization are headwinds for LabCorp.
Over the past three months, shares of LabCorp have climbed 7.5% against the industry’s 4.1% decline.
In first-quarter 2019, the company reported a strong underlying performance and organic revenue growth across both Diagnostics and Drug Development businesses, banking on a solid execution of three fundamental strategies, which are delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve the patient care.
Laboratory Corporation of America Holdings Price
Laboratory Corporation of America Holdings price | Laboratory Corporation of America Holdings Quote
During the quarter under review, Diagnostics business grew organically in terms of both revenues and volumes despite additional price reductions due to PAMA and the loss of exclusivity in two of the company’s largest managed care contracts. Revenues from all aspects of companion diagnostics surged more than 30% across the enterprise in the first quarter.
Covance Drug Development also rose organically despite an adverse impact of the foreign currency translation. During the reported quarter, the company enhanced Covance's offerings through strategic acquisitions like MI Bioresearch that bring about specialized preclinical capabilities in cell and gene therapy plus oncology testing.
In April, the company announced an innovative business swap transaction with Envigo. This strategic move provides Covance with enhanced global non-clinical research capabilities while maintaining access to bigger research models and services through a multi-year renewable supply agreement. This apart, the Covance LaunchPad initiative is well on track to deliver $150 million of net savings by the end of 2020.
On the flip side, the current economic volatility comprising a tough volume environment for the testing laboratories and utilization weaknesses are looming downsides for the company. This apart, the disposition of certain businesses and the implementation of the Protecting Access to Medicare Act (PAMA) dented growth. Moreover, an unfavorable currency movement persists as a major woe. The company also expects 2019 to continue witnessing similar hurdles.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Cerner Corporation , Penumbra (PEN - Free Report) and Bruker Corporation (BRKR - Free Report) . While Cerner sports a Zacks Rank #1 (Strong Buy), Penumbra and Bruker carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cerner’s long-term earnings growth rate is expected to be 13.5%.
Penumbra’s long-term earnings growth rate is projected at 21.5%.
Bruker’s long-term earnings growth rate is estimated at 11.7%.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>