Labcorp Partners with Prisma Health; Street Says Buy

Life sciences company Laboratory Corporation of America Holdings (NYSE: LH), popularly known as Labcorp, recently revealed that it has entered into a strategic partnership with Prisma Health, a South Carolina based nonprofit health organization. The terms of the deal, which is expected to close in the second half of 2022, have not been disclosed so far.

Following the news, shares of the company rose 2.2% to close at $265.63 on Wednesday.

Strategic Impact

The partnership involves Labcorp acquiring specific assets of Prisma Health’s outreach laboratory business. Additionally, the two companies have signed a technical support agreement to make use of Labcorp’s expertise in Prisma Health’s hospital laboratories.

The partnership will allow Labcorp to expand its diagnostic footprint and capabilities in Carolina, while Prisma Health patients will have access to Labcorp’s extensive lab testing capabilities and expanded health plan coverage benefits.

Management Commentary

The Senior Vice-President of Labcorp Diagnostics’ Atlantic Division, Traci Butler, said, “Prisma Health is an established leader in providing health care and diagnostic services to South Carolina residents, and its dedication to its patients closely aligns with Labcorp’s mission to improve health and improve lives. This relationship builds on Labcorp’s strong track record of providing the critical information that patients and providers need to make the best possible health decisions. It also underscores our commitment and dedication to the people who call the Carolinas home.”

Stock Rating

Recently, UBS analyst Kevin Caliendo reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $353 to $343, which implies upside potential of 29.1% from current levels.

Consensus among analysts is a Strong Buy based on 10 Buys and 1 Hold. The average Labcorp stock prediction of $343.18 implies upside potential of 29.2% from current levels. Shares have gained 14.2% over the past year.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on LH, as 8.7% of portfolios tracked by TipRanks increased their exposure to LH stock over the past 30 days.

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