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Laboratory Corp of America Holdings LH

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COVID-19 Diagnostic Demand Supports LabCorp's Strong Third-Quarter Results

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

LabCorp delivered stellar third-quarter results, with improvements on the top and bottom lines that were generally consistent with our projections, and we’re leaving our fair value estimate unchanged. With demand for COVID-19 diagnostic tests remaining relatively high, though not quite as high as we’d seen in the second quarter, the benefit of LabCorp’s long-standing investments in its information technology systems and the operating leverage in its network of high-throughput labs came shining through in this quarter. The firm’s impressive efficiency underscores our confidence in its narrow economic moat, which stems from its significantly lower cost structure.

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Company Profile

Business Description

Laboratory Corporation of America is one of the nation's two largest independent clinical laboratories, with roughly 20% of the independent lab market. The company operates approximately 2,000 patient-service centers, offering a broad range of 5,000 clinical lab tests, ranging from routine blood and urine screens to complex oncology and genomic testing. With the addition of Covance, LabCorp also has a sizable footprint in the global contract research organization market.

Contact
358 South Main Street
Burlington, NC, 27215
T +1 336 229-1127
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 65,000

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