Labcorp Holdings (NYSE:LH) stock is trading at a 52-week high after the company reported upbeat third-quarter earnings and raised its fiscal outlook.
Labcorp reported third-quarter adjusted earnings of $4.78, beating the consensus of $4.66. Sales reached $3.81 billion, up 6.9% year over year, beating the Wall Street estimate of $3.759 billion.
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Diagnostics revenue grew by 6.5% to $2.9 billion, while Biopharma Laboratory Services revenue increased by 8.5% to $867 million.
The combination of healthy organic growth and continued operating efficiencies drove 40 basis points of margin expansion in Diagnostics.
Strategic Portfolio Expansion Across Diagnostic Assets
The company entered into agreements to acquire select assets of BioReference Health, Myriad Genetics’ Prenatal Health Testing business, and Millennium Health.
In an earnings conference call, CFO and Executive Vice President Julia Wang said, “In addition to being strong strategic fits, each of these transactions is expected to meet our acquisition financial criteria of being accretive to adjusted EPS in year one and returning cost of capital by year three. As is typical with all of our acquisitions, we expect these transactions to become more accretive over time as we fully integrate.”
CMS Fee Schedules and Managing PAMA Reimbursement Headwinds
“As we look towards 2027, based on the preliminary fee schedule proposed by CMS, we estimate the impact of PAMA to be approximately $125 million, and we expect to offset a portion of that impact with our underlying business momentum in Diagnostics, strong biopharma business development opportunities and LaunchPad initiatives.” Wang further said.
Adam Schechter, chairman and CEO, told investors, “We previously considered PAMA-related reimbursement pressure in developing our 2026 to 2029 long-term outlook, and we are reaffirming that outlook today. With our strong underlying business momentum, our strong Biopharma Laboratory business, and the business development opportunities before us, along with our LaunchPad initiatives, we remain very positive about the future.”
Raised Fiscal 2026 Sales and Profit Guidance
Labcorp raised fiscal 2026 adjusted earnings from $18.10-$18.55 per share to $18.30-$18.70 per share compared to the consensus of $18.36.
The lab service provider also raised its 2026 sales guidance from $14.71 billion-$14.827 billion to $14.779 billion-$14.887 billion compared to the consensus of $14.749 billion.
LH Price Action: Labcorp Holdings shares were up 10.50% at $365.95 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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