NEW YORK – Evercore ISI said Tuesday that it has upgraded Laboratory Corporation of America's shares to an Outperform rating from an In Line rating and increased its price target to $265 from $260.
Analyst Elizabeth Anderson said in a note to investors that the bank expects solid lab volume growth in 2025 including organic diagnostics volume growth in the range of 3 percent to 4 percent even if healthcare utilization of testing softens. It also expects that Labcorp's Invitae business, acquired in the spring, will become slightly accretive in 2025 through revenue growth and cost synergies even while that business had been a drag on revenue growth in 2024.
As a result, Evercore ISI expects margin expansion in Labcorp's diagnostics business and earnings per share growth of 12 percent, which exceeds the company's long-term target of growth in the range of 8.5 percent to 11.5 percent, Anderson said. Evercore expects 2025 EPS in the range of $16.18 to $16.37.
Evercore had initiated coverage of Labcorp in February with an In Line rating and a price target of $240.
In morning trading on the New York Stock Exchange on Tuesday, Labcorp shares were up 3 percent at $236.99.