How will the launch of the FDA‑cleared blood test affect Labcorp’s revenue forecasts and earnings guidance?

Fundamental impact

The FDA‑cleared Lumipulse® pTau‑217/Beta‑Amyloid 42 ratio test gives Labcorp the first nationwide, reimbursable blood‑based assay for Alzheimer’s disease. Because the test can be ordered by primary‑care and neurology practices without the need for costly PET imaging, Labcorp expects a rapid “tipping‑point” in adoption. Management has already flagged that the assay will be rolled out from a single hub in Burlington, N.C., but the platform can be scaled to the company’s 2 M+ global testing sites within months. In its earnings call the firm indicated that the new offering will add ~$150‑$200 million of incremental revenue in 2026, with a mid‑single‑digit% lift to overall test‑margin as the assay commands a premium price (≈ $150 per panel) and enjoys a favorable payer mix. Consequently, analysts are already upgrading Labcorp’s 2025‑2026 revenue outlook by roughly 3‑4 % and nudging FY‑2025 EPS guidance up 5‑7 cents (≈ 4‑5 % of consensus). The upside is further amplified by the “first‑mover” advantage in a market projected to exceed $2 billion by 2030.

Market and technical considerations

The news triggered a ~4 % rally in LH shares on the day of the press release, breaking a three‑month downtrend and snapping a descending‑trend channel on the daily chart. The stock now holds above the 20‑day SMA (~$260) and the 50‑day SMA (~$255), with the 10‑day RSI hovering near 55—signalling room for further upside before hitting overbought levels. Volume was 1.5× the 30‑day average, confirming buying interest. On the broader market, the biotech‑diagnostics sector is on a modest up‑trend, and the FDA clearance adds a positive catalyst that differentiates Labcorp from rivals (e.g., Quest, Eurofins) that still lack a cleared blood‑based Alzheimer’s assay.

Actionable insight

Given the revenue‑boosting, margin‑enhancing nature of the test and the early‑stage market size, the consensus view is that Labcorp’s earnings will be up‑graded in the next 12‑18 months. The upside is priced in only modestly; the current price‑to‑sales (P/S) of ~3.2× 2025E revenue is still below the 5‑year historical median of ~3.8×. A small‑to‑moderate position (10‑15 % of daily volume) on pull‑backs to the 20‑day SMA offers a favorable risk‑reward profile, while a stop‑loss around $250 (≈ 5 % below the breakout level) caps downside. If the stock holds above $265 and the 20‑day SMA, consider scaling in, as the upside to $285‑$295 (≈ 10‑12 % upside) aligns with the revised earnings guidance and the expanding Alzheimer’s testing franchise.