Labcorp (LH) Q3 2026: Earnings Beat, Guidance Raised, Four Deals Pending
As seen on the 24/7 Wall St. homepage on October 28, 2026.
Labcorp raised full-year adjusted EPS guidance to $18.30-$18.70 after beating on both lines, led by biopharma lab services organic revenue growth. Four pending acquisitions are expected to add to earnings in year one, even as CMS floats 2027 lab reimbursement cuts.
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Labcorp posted adjusted EPS of $4.78 for the third quarter of 2026, beating expectations, with revenue also above estimates. It is the eighth consecutive quarter above Wall Street's EPS forecast.
Biopharma Laboratory Services drove the quarter, with adjusted operating margin expanding 180 basis points to 18.3%. Diagnostics Laboratories also grew requisition volume and widened margin, so both halves of the business are pulling in the same direction.
Free cash flow jumped to $412.2 million on working capital improvements, giving Labcorp the runway to close four pending acquisitions: MLM Medical Labs, select assets from BioReference Health, Myriad Genetics' prenatal testing business, and Millennium Health. Each is expected to contribute to earnings in its first year.
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Management raised full-year adjusted EPS guidance to a range of $18.30 to $18.70 and lifted the enterprise revenue outlook. Free cash flow guidance was held unchanged, signaling confidence in the cash profile even as capital expenditures rose.
The risk investors are pricing alongside this guidance lift is a proposal from CMS for 2027 lab reimbursement cuts. Regulatory approval for the four pending acquisitions also remains outstanding. CEO Adam Schechter noted that Labcorp launched new tests for advanced melanoma, Alzheimer's disease, and hepatitis D during the quarter, signaling that the innovation pipeline is meant to offset any reimbursement pressure over time.
Mentioned: LH