Truist remains bullish on Labcorp after ‘another nice strategic acquisition’

Truist analyst David MacDonald notes Labcorp (LH) announced that the company has reached an agreement to acquire oncology-focused lab testing assets from BioReference Health (OPK) for $192.5M, with an additional earnout of up to $32.5M. The deal is expected to close in the second half of 2025, meets the company’s financial/strategic criteria and is expected to be accretive to earnings year one. The deal continues the strong M&A momentum from 2024, and Truist expects the additional BioReference assets to help further underpin the company’s 1.5%-2.5% annual revenue growth from M&A target. Finally, the firm continues to view the company’s brisk cash flow generation and sound financial flexibility as providing solid flexibility in an environment where it continues to expect brisk ongoing capital deployment to augment attractive core trends. Truist reiterates a Buy rating and $285 price target on the shares.