Analysts took action on healthcare stocks.
Goldman Sachs resumed Laboratory Corp. of America Holdings (LH, Financial) on its conviction buy list and initiated coverage on Quest Diagnostics (DGX, Financial) with a buy rating.
Goldman Sachs set a price target of $205 per share of LabCorp, which has a 15% upside from the current share price of $178.11; while for a share of Quest Diagnostics, the U.S. bank set a price target of $117. Quest Diagnostics new price target is an 8.5% increase from the current market value of $107.88 per unit.
Over the last six months of trading, LabCorp received one outperform rating from Evercore ISI Group, which started covering shares of the company this year. Analysts, including Barclays (overweight), Deutsche Bank (buy), Canaccord Genuity (buy) and Morgan Stanley (overweight) kept their previous ratings.
Source: Yahoo Finance
Some indicators on LabCorp:
The price-book (P/B) ratio is 2.97 versus an industry median of 4.10
The price-sales (P/S) ratio is 1.83 versus an industry median of 11.76
The EBITDA margin is 19.2% versus an industry median of 66.5%
The price-earnings (P/E) ratio is 24.84 versus an industry median of 29.02
According to the Peter Lynch chart, LabCorp is trading above the earnings line without NRI and over that one with NRI.
Quest Diagnostics was started to be covered by Evercore ISI Group on Jan. 5, 2018.
During the last four months of 2017, Canaccord Genuity (buy), Wells Fargo (maket perform), Citigroup (neutral) and Credit Suisse (neutral) maintained their ratings on Quest Diagnostics.
In 2017, Quest Diagnostics received only one downgrade and that was from Raymond James on Sept. 25. The firm downgraded its rating to market perform from outperform, as you can see in the chart from Yahoo Finance.
Source: Yahoo Finance
Some indicators on Quest Diagnostics:
· The price-book (P/B) ratio is 3.06 versus an industry median of 3.97.
· The price-sales (P/S) ratio is 1.98 versus an industry median of 3.68.
· The EBITDA margin is 19.6% versus an industry median of 18.7%.
· The price-earnings (P/E) ratio is 22.62 versus an industry median of 34.50.
· The current dividend yield is 1.66% versus an industry median of 0.89% and versus a S&P 500 current dividend yield of 1.71%
According to the Peter Lynch chart, Quest Diagnostics is trading above the earnings line and the price at Med P/E without NRI:
The other two healthcare stocks on this mini-list that have been re-rated yesterday by analysts are Allergan PLC (AGN, Financial) and AbbVie (ABBV, Financial).
Allergan has been upgraded by Barclays to overweight from a previous rating of equal-weight, according to a research note dispatched by the analyst yesterday, Jan. 29.
Some indicators on Allergan:
· The price-book (P/B) ratio is 0.95 versus an industry median of 2.86.
· The price-sales (P/S) ratio is 4.11 versus an industry median of 2.79.
· The EBITDA margin is -18.7% versus an industry median of 18.5%.
· The price-earnings (P/E) ratio is negative.
· The current dividend yield is 1.5% versus an industry median of 1.58% and versus a S&P 500 current dividend yield of 1.72%
Also Leerink Swann downgraded shares of AbbVie from outperform to a new rating of market perform based on yesterday’s note research.But fourth quarter results demonstrated Humira is a strong sales generator.
As you can see in the chart from Yahoo Finance, AbbVie was upgraded by Cowen & Co. to outperform last year Oct. 11.
BMO Capital (to Market), Leerink Swann (outperform), Barclays (equal-weight) and UBS (neutral) maintained their ratings on AbbVie last year.
Source: Yahoo Finance
Some indicators on AbbVie:
· The price-book (P/B) ratio is 29.16 versus an industry median of 2.86.
· The price-sales (P/S) ratio is 7.21 versus an industry median of 2.79.
· The EBITDA margin is 36.5% versus an industry median of 18.5%.
· The price-earnings (P/E) ratio is 37.18 versus an industry average of 25.41.
· The current dividend yield is 2.15% versus an industry median of 1.58% and versus a S&P 500 current dividend yield of 1.71%.
According to the chart of Peter Lynch, AbbVie is trading above the earnings line and the price at Med P/E without NRI:
For the 52 weeks through Jan. 29 AbbVie skyrocketed 102.40% and outperformed the S&P 500 index by 77.3%. LabCorp climbed 35% on the stock market. Quest Diagnostics gained 19.15% while Allergan lost 11.60%.
Source: Yahoo Finance
Quest Diagnostics and Allergan underperformed the benchmark by 6% and 36.7%.
Among the top institutional holders of the healthcare stocks mentioned in this mini-list: Vanguard Group, Inc. owns 10.21% of shares outstanding of Laboratory Corporation of America Holdings, 10.53% of Quest Diagnostics Incorporated, 6.18% of AbbVie and 6.94% of Allergan.
Blackrock Inc. owns 7.67% of shares outstanding of Laboratory Corporation of America Holdings, 10.98% of Quest Diagnostics Inc., 7.39% of AbbVie and 6% of Allergan.
Capital Research Global Investors is the top shareholder of AbbVie with 189,015,179 shares of the pharmaceutical company in its portfolio or 11.84%, as of Sept. 29, 2017.
(Disclosure: I have no positions in any security mentioned in this article.)
