On Monday, Laboratory Corporation of America stock (NYSE:LH), also known as LabCorp, received an upgrade from a Hold to a Buy rating by Argus, a notable shift in market confidence. The firm also established a new price target for LabCorp at $250. This decision is based on the anticipation of stronger top-line growth and margin expansion for the company in 2024.
LabCorp is expected to benefit from increased demand for its Base Business testing and central lab services, which are essential for supporting biopharmaceutical clinical trials. The company has been on an expansion trajectory, broadening its range of testing services in various medical fields, including oncology, women's health, autoimmune diseases, and neurology.
The growth strategy of LabCorp is not limited to the introduction of new tests. The company has been actively engaging in acquisitions and forming partnerships with health systems and regional local laboratories. These strategic moves are designed to enhance LabCorp's market presence and service offerings.
In addition to expanding its existing services, LabCorp is also focusing on the development, licensing, and sale of specialty testing solutions. One of the key areas highlighted is the field of companion diagnostics, which are tests designed to help determine the most effective treatments for patients based on their specific characteristics.
LabCorp's international endeavors include enabling its central labs located in China and Geneva to perform liquid biopsy tests for clinical trials. This capability is particularly significant as it positions the company to be a leading laboratory in the burgeoning field of cell and gene therapy. The introduction of these new tests is expected to contribute to an improved price mix and enhance the company's profit margins.
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