This is our first report on a life sciences major, Laboratory Corporation of America Holdings. The company had a mixed quarter and failed to meet the revenue expectations of Wall Street despite decent revenue growth in diagnostics. Drug development continued to face challenging year-over-year comparisons, mostly because of reduced COVID-related efforts. The Base Business is still robust. COVID PCR testing volumes decreased during the quarter but the company still managed an earnings beat. Clinical Development and Early Development experienced growth. However, this was countered by a decline in revenue from the central laboratory, primarily because of COVID-related activities. With the announcement of the intended spinoff of their Clinical Development business, the management have demonstrated that they have a much more focused strategy. They also concluded many significant hospital laboratory collaborations. Furthermore, the company revealed Fortrea as the name of the Clinical Development division. Laboratory Corporation established strategic partnerships with RWJBarnabas Health. The acquisition and investment pipeline for hospitals and neighborhood laboratories is strong and will represent a significant area for expansion in 2023 and beyond. They also made headway toward improving patient outcomes using data and digital technology. In addition, they launched Labcorp OnDemand to give customers simple, accessible access to their top diagnostic tests. We initiate coverage on the stock of Laboratory Corporation of America Holdings with a ‘Buy’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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