Labcorp LH is a leading healthcare diagnostics company that offers comprehensive clinical laboratory services and end-to-end drug development support. They provide crucial information to doctors, hospitals, pharmaceutical companies, researchers, and patients to make informed decisions.
However, analysts have significantly lowered their earnings expectations for Labcorp, resulting in a Zacks Rank #5 (Strong Sell) for the company.
Image Source: Zacks Investment Research
Now, let’s dive deeper into some other characteristics of the company.
Current Standing
Labcorp shares have experienced a volatile performance in 2023, with a modest year-to-date increase of 0.3%, significantly lagging behind the overall market.
The market hasn’t responded well to the company’s recent quarterly reports, leading to regular selling pressure.
Image Source: Zacks Investment Research
In the most recent quarter, Labcorp fell short of the Zacks Consensus EPS Estimate by 1.5% but slightly surpassed revenue expectations. Earnings declined by 31% compared to the same period last year, while sales decreased by 18% year-over-year.
Operating income, on the other hand, totaled $266 million, a nearly 40% decrease from the previous year due to a significant reduction in COVID-19 testing. The following chart illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
The company is expected to experience a growth slowdown in the current year (FY23) due to reduced COVID-19 testing. Earnings are projected to decline by over 30% with a 19% decrease in revenue for FY23 before returning to growth in FY24.
Image Source: Zacks Investment Research
Bottom Line
Negative earnings estimate revisions from analysts and a slowdown in COVID-19 testing present challenges for Labcorp’s shares in the near term. Labcorp (LH) currently holds a Zacks Rank #5 (Strong Sell), indicating a bearish stance on the company’s earnings outlook.
If you’re interested in strong stocks, it would be wise to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). These stocks have a significantly stronger earnings outlook and potential for substantial gains in the near future.
7 Best Stocks for the Next 30 Days
Experts have carefully selected 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. These stocks are deemed “Most Likely for Early Price Pops.”
Since 1988, the complete list has outperformed the market more than two times with an average annual gain of +24.3%. Make sure to give these hand-picked 7 stocks your immediate attention.
Labcorp (LH) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
