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Labcorp (LH) Announces Completion of the Fortrea Spin-off
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Laboratory Corporation of America Holdings (LH - Free Report) , or Labcorp, recently announced the completion of the planned spin-off of its Clinical Development business which has been named Fortrea. Newly formed Fortrea will operate as an independent Contract Research Organization providing Phase I-IV clinical trial management, patient access and technology solutions to pharmaceutical and biotechnology organizations worldwide.
As previously announced, Fortrea’s common stock is listed on The Nasdaq Stock Market with the ticker FTRE, effective for trading from Jul 3 onward.
Additional Details
Upon closing, Fortrea made a cash distribution to Labcorp of approximately $1.6 billion as a partial consideration for the assets Labcorp contributed to Fortrea in connection with the spin-off. The proceeds are likely to be used for a $1.0 billion accelerated share repurchase program and repay the $300 million of debt maturing this year. The remaining funds are to be returned to shareholders through additional future share repurchases and/or cash dividends.
Image Source: Zacks Investment Research
The spin-off has come into effect through the distribution of 100 percent of the Fortrea common stock to Labcorp's common stockholders, each receiving one share of Fortrea common stock for every share of LH common stock they held as of the record date.
The transaction is intended to qualify as a tax-free distribution to Labcorp's stockholders and the company for U.S. federal income tax purposes.
Recent Strategic Developments
Last week, LH announced gene therapy development and manufacturing collaboration with the biotech research company, Forge Biologics. Labcorp’s comprehensive gene therapy drug development capabilities and scientific expertise, combined with the full suite of AAV manufacturing capabilities from Forge, will potentially enhance and accelerate the AAV gene therapy development experience for customers.
Earlier in May 2023, Labcorp announced a strategic laboratory relationship with Jefferson Health, the largest health system serving the greater Philadelphia area and Southern New Jersey. The relationship will serve to build academic collaborations around teaching and the development of innovative tests.
During the same month, LH also expanded its longstanding strategic relationship with Providence via an agreement to acquire the select assets of Providence Oregon's outreach laboratory business. At present, Labcorp provides laboratory services to several Providence affiliate medical facilities and reference testing for facilities across multiple states served by Providence in the western United States.
Price Performance
In the past six months, Shares of Labcorp have decreased 12.9% against the industry’s rise of 14.4%.
Penumbra’s stock has risen 167.8% in the past year. The Zacks Consensus Estimate for Penumbra’s earnings per share (EPS) has remained constant at $1.56 for 2023 and at $2.56 for 2024 in the past 30 days.
PEN’s earnings beat estimates in each of the trailing four quarters, the average surprise being 109.42%. In the last reported quarter, the company registered an earnings surprise of 109.09%.
The Zacks Consensus Estimate for Lantheus’ 2023 EPS has remained constant at $5.60 in the past 30 days. Shares of the company have improved 29.4% in the past year against the industry’s 21.4% decline.
LNTH’s earnings beat estimates in each of the trailing four quarters, the average surprise being 25.77%. In the last reported quarter, the company recorded an earnings surprise of 13.95%.
Estimates for Haemonetics’ EPS have increased from $3.55 to $3.56 for 2023 in the past 30 days. Shares of the company have increased 26.1% in the past year against the industry’s 21.4% decline.
HAE’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.21%. In the last reported quarter, Haemonetics delivered an earnings surprise of 13.24%.
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Labcorp (LH) Announces Completion of the Fortrea Spin-off
Laboratory Corporation of America Holdings (LH - Free Report) , or Labcorp, recently announced the completion of the planned spin-off of its Clinical Development business which has been named Fortrea. Newly formed Fortrea will operate as an independent Contract Research Organization providing Phase I-IV clinical trial management, patient access and technology solutions to pharmaceutical and biotechnology organizations worldwide.
As previously announced, Fortrea’s common stock is listed on The Nasdaq Stock Market with the ticker FTRE, effective for trading from Jul 3 onward.
Additional Details
Upon closing, Fortrea made a cash distribution to Labcorp of approximately $1.6 billion as a partial consideration for the assets Labcorp contributed to Fortrea in connection with the spin-off. The proceeds are likely to be used for a $1.0 billion accelerated share repurchase program and repay the $300 million of debt maturing this year. The remaining funds are to be returned to shareholders through additional future share repurchases and/or cash dividends.
Image Source: Zacks Investment Research
The spin-off has come into effect through the distribution of 100 percent of the Fortrea common stock to Labcorp's common stockholders, each receiving one share of Fortrea common stock for every share of LH common stock they held as of the record date.
The transaction is intended to qualify as a tax-free distribution to Labcorp's stockholders and the company for U.S. federal income tax purposes.
Recent Strategic Developments
Last week, LH announced gene therapy development and manufacturing collaboration with the biotech research company, Forge Biologics. Labcorp’s comprehensive gene therapy drug development capabilities and scientific expertise, combined with the full suite of AAV manufacturing capabilities from Forge, will potentially enhance and accelerate the AAV gene therapy development experience for customers.
Earlier in May 2023, Labcorp announced a strategic laboratory relationship with Jefferson Health, the largest health system serving the greater Philadelphia area and Southern New Jersey. The relationship will serve to build academic collaborations around teaching and the development of innovative tests.
During the same month, LH also expanded its longstanding strategic relationship with Providence via an agreement to acquire the select assets of Providence Oregon's outreach laboratory business. At present, Labcorp provides laboratory services to several Providence affiliate medical facilities and reference testing for facilities across multiple states served by Providence in the western United States.
Price Performance
In the past six months, Shares of Labcorp have decreased 12.9% against the industry’s rise of 14.4%.
Zacks Rank and Key Picks
Labcorp currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the overall healthcare sector are Penumbra (PEN - Free Report) , Lantheus (LNTH - Free Report) and Haemonetics (HAE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Penumbra’s stock has risen 167.8% in the past year. The Zacks Consensus Estimate for Penumbra’s earnings per share (EPS) has remained constant at $1.56 for 2023 and at $2.56 for 2024 in the past 30 days.
PEN’s earnings beat estimates in each of the trailing four quarters, the average surprise being 109.42%. In the last reported quarter, the company registered an earnings surprise of 109.09%.
The Zacks Consensus Estimate for Lantheus’ 2023 EPS has remained constant at $5.60 in the past 30 days. Shares of the company have improved 29.4% in the past year against the industry’s 21.4% decline.
LNTH’s earnings beat estimates in each of the trailing four quarters, the average surprise being 25.77%. In the last reported quarter, the company recorded an earnings surprise of 13.95%.
Estimates for Haemonetics’ EPS have increased from $3.55 to $3.56 for 2023 in the past 30 days. Shares of the company have increased 26.1% in the past year against the industry’s 21.4% decline.
HAE’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.21%. In the last reported quarter, Haemonetics delivered an earnings surprise of 13.24%.