What happened?
Shares of healthcare diagnostics company Labcorp Holdings (NYSE: LH) jumped 10.3% in the afternoon session after the company reported third-quarter financial results that were above Wall Street expectations and raised its full-year forecast.
According to a company press release, Labcorp reported third-quarter revenue of $3.81 billion, up from $3.56 billion in the previous-year period. Revenue was above analyst expectations of $3.76 billion.
Adjusted earnings per share rose to $4.78 from $4.18 in the previous-year period, which was above the consensus estimate of $4.65. Diluted earnings per share increased to $3.22 from $3.12. In addition to the quarterly results, the company raised its full-year 2026 outlook.
It updated its full-year enterprise revenue growth guidance to between 5.9% and 6.7% and increased its full-year adjusted earnings per share guidance to a range between $18.30 and $18.70.
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What is the market telling us
Labcorp’s shares are not very volatile and have had no moves greater than 5% over the last year. Moves this big are rare for Labcorp and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 3.1% on the news that the market experienced a sharp sector rotation, as investors fled growth-oriented technology stocks and piled into value-oriented names amid growing valuation concerns. This divergence was stark: the tech-heavy Nasdaq struggled, losing 0.2%, while the Dow rallied. This shift away from tech was triggered by a series of negative catalysts in the AI sector. AI cloud provider CoreWeave slid on disappointing guidance, while chip darling Nvidia pulled back after SoftBank sold its stake. This "hurt the AI trade," dragging down related names like Micron and Oracle.
As capital left tech, it sought safety in "higher quality" defensive names. Health care giants like Merck, Amgen, and Johnson & Johnson saw significant buying, boosting the Dow.
Labcorp is up 45.4% since the beginning of the year, and at $365.79 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Labcorp’s shares 5 years ago would now be looking at an investment worth $1,282.
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