BURLINGTON – Labcorp’s Board of Directors and its executive management team currently believe that the company’s value “is not being appropriately reflected in the Company’s current stock price.” In other words, changes are likely to be coming.
The news made in a statement after the markets closed Wednesday impressed investors. LabCorp (NYSE: LH) shares rose more than 5% Thursday morning.
Shares in fact reached a 52-week high of 254.91 before slipping.
Its 52-week low is $108.61.
The life science giant’s board has begun a review of its capital allocation strategy and its underlying structure, working with Goldman Sachs as a financial advisor in the process. LabCorp declined to comment further on this review, and does not plan to do so until its board “has reached a conclusion,” the announcement reads.
The news comes 16 months into the tenure of CEO and chair Adam Schechter who replaced long-time CEO and chair David King. King retired on Oct. 31, 2019, and became the firm’s executive chair. Schechter is a former Merck executive.
LabCorp employs some 61,000 people and has major operations across North Carolina.
The company reported a 2020 fourth-quarter profit of $938.3 million earlier this year, which topped analyst expectations. That equated to a profile per share of $9.54 or adjusted earnings per share when factoring in non-recurring costs of $10.56 compared to analysts predictions averaged from eight industry analysts of $8.05 per share. The same WRAL TechWire report listed Labcorp’s 2020 annual profit at $1.56 billion, or $15.88 per share.
LabCorp does continue to hire. It currently lists 93 open positions in its headquarters in Burlington, N.C.
