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    What Labcorp Holdings (LH)'s Slowing Growth and Margin Pressure Means For Shareholders

    Simply Wall St·12/11/2025 03:19:47
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    • Recent commentary on Labcorp Holdings has highlighted persistently slow organic sales growth, declining adjusted operating margins, and a weaker return on invested capital, raising fresh concerns about its core laboratory and drug development operations.
    • These trends suggest Labcorp may need to rethink its cost base and capital allocation, as investors question whether the company is still finding enough high-quality, profitable growth opportunities.
    • Next, we’ll examine how concerns over Labcorp’s slowing organic growth and margin pressure reshape the company’s broader investment narrative.

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    Labcorp Holdings Investment Narrative Recap

    To own Labcorp, you need to believe its broad diagnostic and biopharma lab footprint can still translate into healthy, profitable growth despite slower organic sales and thinner margins. The latest commentary reinforces that the key near term catalyst is whether Labcorp can stabilize profitability in its core businesses, while the biggest risk is that persistent cost pressure and weak returns on invested capital signal a more structural profitability issue rather than a temporary setback.

    Against that backdrop, Labcorp’s expanded precision oncology and digital pathology efforts, including new ctDNA tests and AI enabled pathology collaborations, look particularly relevant. These announcements speak directly to the push for higher value, complex testing and more efficient trial support, which could help offset slower organic growth elsewhere and support any margin recovery if execution is strong.

    Yet, in contrast to the promise of advanced oncology and AI tools, investors should be aware that...

    Read the full narrative on Labcorp Holdings (it's free!)

    Labcorp Holdings’ narrative projects $15.6 billion revenue and $1.3 billion earnings by 2028. This requires 5.1% yearly revenue growth and an earnings increase of about $0.5 billion from $763.4 million today.

    Uncover how Labcorp Holdings' forecasts yield a $299.71 fair value, a 14% upside to its current price.

    Exploring Other Perspectives

    LH 1-Year Stock Price Chart
    LH 1-Year Stock Price Chart

    Four fair value estimates from the Simply Wall St Community range from US$200 to about US$574.63, underlining how far apart individual views can be. When you set those against concerns about shrinking adjusted operating margins and weaker returns on invested capital, it becomes even more important to compare different assumptions about how Labcorp’s profitability might evolve.

    Explore 4 other fair value estimates on Labcorp Holdings - why the stock might be worth over 2x more than the current price!

    Build Your Own Labcorp Holdings Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.