LH - Embedded Expectations Analysis - 2020 06 19
Laboratory Corporation of America Holdings (LH:USA) currently trades near historical highs relative to UAFRS (Uniform) earnings, with a 27.0x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management appears concerned about serology tests, at-home coronavirus testing capacity, and growthSpecifically, management may have concerns about coronavirus-related challenges, the progress of debates about the proper use of serology tests in the marketplace, and the potential for increases in cancellations. In addition, they may lack confidence in their ability to deliver world-class diagnostics, ramp-up to 100,000 daily RNA and polymerase chain reaction tests, and sustain CRO business growth. Furthermore, they may be concerned about the sustainability of at-home coronavirus test demand and net earnings losses
Laboratory Corporation of America Holdings is a life sciences company that is focused on guiding patient care. The company reports its business in the following segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). LCD is an independent clinical laboratory business. LCD provides a menu of requested and specialty testing through a network of primary and specialty laboratories across the United States. CDD provides drug development, medical device and diagnostic development solutions from early-stage research to clinical development and commercial market access. CDD engages in early development and clinical trials in each therapeutic category.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.