Leerink on Laboratory Corporation of America (LH): 'Sell-off Unwarranted'

Leerink Partners analyst Michael Cherny reiterated an Outperform rating and $342.00 price target on Laboratory Corporation of America (NYSE: LH).

The analyst comments "We remain positive on LH and view the pronounced weakness post-Q as an opportunity for a durable compounder at a more appealing valuation. As we noted in our first take, which was confirmed on the call, the vast majority of the business is either operating above plan and/or has improving drivers of growth. Within the Dx segment, outperformance was driven by both volume and price, showing the health of that segment. Central Lab saw outperformance on growth, with other CRO reports seemingly setting the stage for ongoing growth. ED was a problem, one that historically has been prone to cyclicality but one that should NOT be driving the LH equity value. We see the current valuation, relative to growth potential and relative to peers including DGX (OP), as too wide and see sustained organic/inorganic growth as supporting ongoing upside. We reiterate our Outperform rating and maintain our price target of $342, based on our unchanged P/E multiple of ~19x (on mostly unchanged estimates)."

For an analyst ratings summary and ratings history on Laboratory Corporation of America click here. For more ratings news on Laboratory Corporation of America click here.

Shares of Laboratory Corporation of America closed at $275.66 yesterday.

You May Also Be Interested In

• HSBC Downgrades Hermes International (RMS:FP) (HESAY) to Hold
• A. O. Smith CEO Stephen Shafer named chairman
• JPMorgan Starts ICICI Prudential Asset Management (ICICIAMC:IN) at Overweight