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LabCorp Grows on Solid Diagnostics, Currency Woes a Drag
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On Aug 28, we issued an updated research report on Burlington, NC-based Laboratory Corporation of America Holdings (LH - Free Report) , popularly known as LabCorp. The company is a major player in healthcare diagnostics space, providing comprehensive clinical laboratory services and end-to-end drug development support.
Last three months, LabCorp has been trading above the broader industry. The stock has surged 10.6% as against the industry’s 1.2% loss during this period. Despite the continued dull performance within the company’s Covance drug development business, the market is upbeat about the Diagnostics business which has successfully demonstrated a solid show over the recent past.
Although Covance Drug Development’s financial performance was down year over year in the recently reported second-quarter 2017, the company is currently on track to achieve its target of $100 million in cost synergies through the three-year period ending in 2017. It has also completed the remaining consolidation of central lab facilities in Europe and the United States.
Notably, the company’s strategic focus on women’s health and reproductive genetics, besides the acquisition of Sequenom, a leader in non-invasive prenatal testing, has reenergized its larger genetic testing portfolio within Diagnostics. Also the market is looking forward to the long-standing strategic collaboration with 23andMe, which has already demonstrated an impressive growth trajectory, providing further strategic collaboration opportunities.
On the flip side, an unfavorable foreign exchange remains a drag of late. The reduced guidance for 2017 also fails to indicate chances of any respite soon. There is also apprehension about a tough reimbursement scenario which the company is already facing to some degree.
Zacks Rank & Key Picks
LabCorp carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are IDEXX Laboratories, Inc. (IDXX - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Edwards Lifesciences Corporation (EW - Free Report) . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You cansee the complete list of today’s Zacks #1 Rank stocks here.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 2.3% over the last six months.
Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has surged 26.9% over the last six months.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 20.4% over the last six months.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
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LabCorp Grows on Solid Diagnostics, Currency Woes a Drag
On Aug 28, we issued an updated research report on Burlington, NC-based Laboratory Corporation of America Holdings (LH - Free Report) , popularly known as LabCorp. The company is a major player in healthcare diagnostics space, providing comprehensive clinical laboratory services and end-to-end drug development support.
Last three months, LabCorp has been trading above the broader industry. The stock has surged 10.6% as against the industry’s 1.2% loss during this period. Despite the continued dull performance within the company’s Covance drug development business, the market is upbeat about the Diagnostics business which has successfully demonstrated a solid show over the recent past.
Although Covance Drug Development’s financial performance was down year over year in the recently reported second-quarter 2017, the company is currently on track to achieve its target of $100 million in cost synergies through the three-year period ending in 2017. It has also completed the remaining consolidation of central lab facilities in Europe and the United States.
Notably, the company’s strategic focus on women’s health and reproductive genetics, besides the acquisition of Sequenom, a leader in non-invasive prenatal testing, has reenergized its larger genetic testing portfolio within Diagnostics. Also the market is looking forward to the long-standing strategic collaboration with 23andMe, which has already demonstrated an impressive growth trajectory, providing further strategic collaboration opportunities.
On the flip side, an unfavorable foreign exchange remains a drag of late. The reduced guidance for 2017 also fails to indicate chances of any respite soon. There is also apprehension about a tough reimbursement scenario which the company is already facing to some degree.
Zacks Rank & Key Picks
LabCorp carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are IDEXX Laboratories, Inc. (IDXX - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Edwards Lifesciences Corporation (EW - Free Report) . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You cansee the complete list of today’s Zacks #1 Rank stocks here.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 2.3% over the last six months.
Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has surged 26.9% over the last six months.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 20.4% over the last six months.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
Learn the secret >>