As Laboratory Corporation of America Holdings (NYSE:LH) announced its earnings release on 31 December 2018, analyst forecasts seem fairly subdued, with profits predicted to rise by 3.6% next year against the higher past 5-year average growth rate of 22%. Currently with trailing-twelve-month earnings of US$884m, we can expect this to reach US$915m by 2020. Below is a brief commentary on the longer term outlook the market has for Laboratory of America Holdings. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Laboratory of America Holdings going to perform in the near future?
The 19 analysts covering LH view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of LH’s earnings growth over these next few years.
This results in an annual growth rate of 4.2% based on the most recent earnings level of US$884m to the final forecast of US$1.0b by 2022. EPS reaches $10.83 in the final year of forecast compared to the current $8.71 EPS today. In 2022, LH’s profit margin will have expanded from 7.8% to 8.0%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Laboratory of America Holdings, I’ve put together three relevant aspects you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Laboratory of America Holdings worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Laboratory of America Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Laboratory of America Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.