Labcorp Q4 Earnings Beat Expectations, 2026 Outlook Positive
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy LH?
Source: seekingalpha
- Earnings Highlights: Labcorp's Q4 Non-GAAP EPS of $4.07 exceeded expectations by $0.13, indicating strong profitability, although revenue of $3.52 billion, up 5.7% year-over-year, fell short of market expectations by $40 million.
- Free Cash Flow Trends: The company reported Q4 free cash flow of $490.3 million, a significant drop from $665.1 million year-over-year, while full-year free cash flow reached $1.21 billion, surpassing the $1.10 billion forecast, reflecting effective cash management.
- 2026 Financial Guidance: Labcorp's guidance for 2026 enterprise revenue is set between $14.61 billion and $14.79 billion, with a midpoint growth of 5.4%, exceeding the $14.63 billion consensus, demonstrating confidence in future growth prospects.
- Earnings Per Share Outlook: The adjusted EPS guidance ranges from $17.55 to $18.25, with a midpoint growth of 8.9%, surpassing the market expectation of $17.52, indicating ongoing improvements in profitability and competitive positioning.
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Analyst Views on LH
Wall Street analysts forecast LH stock price to rise
12 Analyst Rating
10 Buy
2 Hold
0 Sell
Strong Buy
Current: 278.760
Low
270.00
Averages
304.45
High
325.00
Current: 278.760
Low
270.00
Averages
304.45
High
325.00
About LH
Labcorp Holdings Inc. provides comprehensive laboratory services that help doctors, hospitals, pharmaceutical companies, researchers and patients. The Company operates through two segments: Diagnostics Laboratories (Dx) and Biopharma Laboratory Services (BLS). The Diagnostics Laboratories segment includes routine testing and specialty/esoteric testing. Dx operates through a network of patient service centers, branches, rapid response laboratories, primary laboratories, and specialty laboratories. The BLS segment provides drug development and CDx development solutions from early-stage research to clinical development, along with support for crop protection and chemical testing, through its ED and Central Laboratory Services businesses. Its service also includes ambulatory outpatient laboratory services. The Company is focused on four primary specialty testing areas, such as oncology, women's health, autoimmune disease, and neurology.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Earnings Beat: The company’s adjusted EPS reached $4.07, an 18% year-over-year increase, surpassing consensus estimates by $0.13, reflecting ongoing improvements in profitability.
- Full-Year Results: For 2025, Labcorp achieved $14 billion in revenue and $16.44 in adjusted EPS, representing approximately 7% and 13% year-over-year growth, respectively, showcasing the robustness and competitiveness of its business.
- Outlook: The company projects revenue between $14.61 billion and $14.71 billion and adjusted EPS between $17.55 and $18.25 for 2026, exceeding midpoint consensus expectations, indicating management's confidence in future growth.
See More
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- Free Cash Flow Trends: The company reported Q4 free cash flow of $490.3 million, a significant drop from $665.1 million year-over-year, while full-year free cash flow reached $1.21 billion, surpassing the $1.10 billion forecast, reflecting effective cash management.
- 2026 Financial Guidance: Labcorp's guidance for 2026 enterprise revenue is set between $14.61 billion and $14.79 billion, with a midpoint growth of 5.4%, exceeding the $14.63 billion consensus, demonstrating confidence in future growth prospects.
- Earnings Per Share Outlook: The adjusted EPS guidance ranges from $17.55 to $18.25, with a midpoint growth of 8.9%, surpassing the market expectation of $17.52, indicating ongoing improvements in profitability and competitive positioning.
See More
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- 2025 Performance Growth: Labcorp achieved over 7% revenue growth in 2025, with double-digit adjusted EPS growth, reflecting strong performance in its Diagnostics and Central Laboratory businesses, thereby enhancing its competitive position in the market.
- Shareholder Return Plan: The company announced a quarterly cash dividend of $0.72 per share, payable on March 12, 2026, demonstrating its commitment to shareholders, while repurchasing $225 million of common stock in 2025, further boosting EPS.
- 2026 Financial Outlook: Labcorp expects total revenue to reach $13.955 billion in 2026, representing a growth of 4.7% to 6.0% compared to 2025, with adjusted EPS projected between $16.44 and $18.25, reflecting confidence in future growth.
- Cash Flow Performance: The free cash flow for 2025 was $1.206 billion, showing a decrease from 2024, yet still indicating strong capabilities in capital allocation and operational efficiency, supporting future investments and shareholder returns.
See More
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- Market Performance: Equities experienced a decline last week, with all three major indexes falling by at least 1.2%.
- Economic Indicators: This downturn occurred despite a better-than-expected jobs report from the Bureau of Labor Statistics and a relatively stable inflation report.
See More
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- Monetary Policy Balance: As Fed Chair Powell's tenure approaches its end, the market is keenly focused on his performance in balancing maximum employment and stable prices, especially with the upcoming release of the latest meeting minutes, marking one of his final meetings in office.
- Interest Rate Challenges: During Powell's leadership, the Fed has navigated emergency interventions and an aggressive rate-hiking cycle, with the benchmark rate rising from near zero to over 5%; despite initially viewing inflation as 'transitory,' achieving a 'soft landing' for the economy will be a key part of his legacy.
- Market Reaction Expectations: Investors are optimistic about the upcoming personal consumption expenditure data, although the cooler-than-expected CPI could impact the Fed's interest rate outlook, with markets currently pricing in only two quarter-point cuts for the year.
- Industry Dynamics Observation: As concerns over AI disruption grow, stocks in software, finance, and real estate have seen declines, prompting investors to search for the next potentially affected sectors, with Walmart and Deere's upcoming earnings reports likely to be focal points for market attention.
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