Labcorp Holdings, Inc. LH has entered into an agreement with MAWD Pathology Group in Lenexa, KS, to acquire select assets of its clinical and women’s health testing businesses. Both companies share a commitment to improving community health through high-quality laboratory services.

The transaction is anticipated to close in early 2025, subject to customary closing conditions.  In the meantime, operations or services will remain unchanged.

LH Stock’s Likely Trend Following the News

Following the announcement yesterday, Labcorp shares dipped by nearly 1%, finishing at $229.62. On a promising note, the company’s extensive pipeline of potential hospital and local laboratory acquisitions presents significant opportunities for its growth. Labcorp continues to execute its strategic priorities well by being a partner of choice for health systems and regional local laboratories, leveraging science and innovation to expand leadership in important therapeutic areas and utilizing data and technology to bring important services and capabilities to the customers. Henceforth, we expect the market sentiment toward the LH stock to remain positive surrounding this news.

Labcorp has a market capitalization of $19.41 billion. Going by the Zacks Consensus Estimate, the company’s earnings are expected to grow by 7.1% on a 0.7% improvement in revenues. It surpassed earnings estimates in each of the trailing four quarters, with an average beat of 2.87%. 

More on LH’s New Acquisition

Upon completion, the transaction is expected to provide patients, physicians and customers with greater access to Labcorp’s high-quality laboratory services and expanded testing capabilities in communities across Kansas City and the surrounding region. MAWD Pathology Group will continue to provide comprehensive anatomic professional and technical pathology and related services. Labcorp is focused on building MAWD Pathology’s long tradition of high-quality laboratory and healthcare services.

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Meanwhile, this latest development follows other acquisitions and strategic relationships that Labcorp has finalized with a range of local and regional health systems and laboratories that have enhanced services for patients and providers.

Industry Prospects Favoring LH

Per a research report, the global clinical laboratory services market was at $233.24 billion in 2023 and is expected to grow at a compound annual rate of 3.5% through 2030. The market growth is driven by factors such as the increasing burden of chronic diseases and the growing demand for early diagnostic tests. Moreover, rapid advancements in data management and sample preparation due to growing volumes of testing samples are anticipated to boost market growth during the forecast period.

Labcorp’s Recent Developments

Last week, Labcorp announced it has finalized its acquisition of select outreach laboratory services from Ballad Health. The acquisition aims to enhance access to comprehensive, high-quality laboratory services for communities in the Appalachian region. Also, in November 2024, Labcorp acquired select assets and the molecular testing location of Lab Works, an accredited independent clinical laboratory located in Birmingham, AL.

LH Stock Price Performance

In the past six months, Labcorp shares have rallied 11.3% compared with the industry’s 0.5% rise.

LH’s Zacks Rank and Top MedTech Stocks

Labcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Penumbra PEN, Haemonetics HAE and Phibro Animal Health PAHC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penumbra shares have dropped 0.1% in the past year. Estimates for the company’s 2024 earnings per share have increased 2 cents to $2.81 in the past 30 days. PEN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.54%. In the last reported quarter, it posted an earnings surprise of 23.19%.

Estimates for Haemonetics’ fiscal 2025 earnings per share have remained constant at $4.59 in the past 30 days. Shares of the company have dropped 7% in the past year against the industry’s growth of 13.9%. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.82%. In the last reported quarter, it delivered an earnings surprise of 2.75%.

Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have increased 1.9% to $1.62 in the past 30 days. Shares of the company have surged 100% in the past year compared with the industry’s 13.9% rise. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 25.47%. In the last reported quarter, it delivered an earnings surprise of 52.17%.

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