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Labcorp Launches H5 Bird Flu Test Amid US Outbreak: Stock to Gain?

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Labcorp (LH - Free Report) recently announced the commercial availability of its new H5 bird flu molecular test in the United States. The test will help physicians diagnose patients suspected of infection with the H5N1 virus.

The test was developed in collaboration with the CDC (Centers for Disease Control and Prevention) to support public health preparedness strategies.

LH Stock’s Likely Trend Following the News

Since the announcement on Dec. 17, Labcorp shares have fallen 2%, finishing at $226.31 yesterday. On a promising note, the latest development reflects Labcorp’s focus on equipping healthcare providers with the critical diagnostic tools they need to address emerging infectious disease threats, leveraging its scientific expertise and extensive testing capacity. We expect the market sentiment toward LH stock to remain positive surrounding this news.

Labcorp has a market capitalization of $19.41 billion. The company’s earnings yield of 6.3% compares favorably to the industry’s 4.9% yield. It surpassed earnings estimates in each of the trailing four quarters, with an average beat of 2.87%. 

Relevance of Labcorp’s New Test

The test launch comes amid a multistate outbreak of H5 bird flu in poultry and dairy cows, with several recent human cases identified in U.S. dairy and poultry workers. Although the current public health risk remains low, the CDC is monitoring human cases carefully, while the U.S. Department of Agriculture is facilitating comprehensive surveillance of the nation's milk supply and dairy herds. Labcorp's H5 bird flu molecular test can be used to evaluate potential human exposure.

Healthcare providers who suspect H5 bird flu infection in patients can collect a nasopharyngeal swab specimen at the point of care and submit it to Labcorp for analysis. The new test uses polymerase chain reaction (PCR) technology and a specific reagent validated to determine the presence of the H5 virus genetic material. Results are reported to the patient and physician.

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Labcorp's latest partnership with the CDC on the H5 bird flu test builds on a series of collaborations that have provided testing infrastructure and capacity for emerging viruses that cause infectious diseases in humans, including Zika, SARS-CoV-2 (COVID-19) and mpox.

Industry Prospects Favoring LH

Per a research report, the global poultry diagnostics market was valued at $772.4 million in 2023 and is projected to grow at a compound annual rate of 9.8% through 2030. One of the key factors driving the market’s growth is the increasing prevalence of poultry diseases, which has heightened the need for effective diagnostic solutions. Also, technological advancements in diagnostic tools have improved the accuracy and efficiency of disease detection.

More Updates From Labcorp

The company’s latest agreement to acquire select assets of MAWD Pathology Group continues its trend of expanding through acquisitions and strategic relationships with local and regional health systems and laboratories, enhancing services for patients and providers.  Upon completion, the transaction is expected to provide broader access to the company’s high-quality laboratory services and expanded testing capabilities for patients and physicians in Kansas City and the surrounding areas.

LH Stock Price Performance

In the past six months, Labcorp shares have risen 9.1% against the industry’s 1.3% fall.

LH’s Zacks Rank and Key Picks

Labcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Penumbra (PEN - Free Report) , Haemonetics (HAE - Free Report) and Phibro Animal Health (PAHC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penumbra shares have dropped 0.1% in the past year. Estimates for the company’s 2024 earnings per share have increased 2 cents to $2.81 in the past 30 days. PEN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.54%. In the last reported quarter, it posted an earnings surprise of 23.19%.

Estimates for Haemonetics’ fiscal 2025 earnings per share have remained constant at $4.59 in the past 30 days. Shares of the company have dropped 7% in the past year against the industry’s growth of 13.9%. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.82%. In the last reported quarter, it delivered an earnings surprise of 2.75%.

Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have increased 1.9% to $1.62 in the past 30 days. Shares of the company have surged 100% in the past year compared with the industry’s 13.9% rise. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 25.47%. In the last reported quarter, it delivered an earnings surprise of 52.17%.

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