LH Intrinsic Value

LH

Laboratory Corp. Of America Holdings – Diagnostic Imaging Centers

recognized for our innovation, quality, and customer convenience, labcorp delivers timely, accurate results for improved patient care. with scientific expertise in esoteric testing, genomics, and clinical and anatomic pathology, labcorp performs more than one million tests on approximately 400,000 samples each day. labcorp is a pioneer in applying advances in medicine and science to laboratory testing, with more than 35 years of experience in serving physicians and their patients. labcorp operates a sophisticated laboratory network, with corporate headquarters in burlington, nc, and more than 34,000 employees worldwide. our more than 220,000 clients include physician offices, hospitals, managed care organizations, and biotechnology and pharmaceutical companies. laboratory corporation of america holdings is listed on the new york stock exchange (nyse) under ticker symbol lh.

Analysis Results

Intrinsic Value	$1,711.81
Latest Price	$221.74
Relative Value	87% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 14.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2023	3.08	2.96
2024	3.53	3.27
2025	4.06	3.61
2026	4.66	3.99
2027	5.36	4.41

Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 161 billion. This corresponds to a present value of 127 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 18.2 billion. Adding in the terminal value gives a total present value of 145 billion.

There are presently 84.9 million outstanding shares, so the intrinsic value per share is 1711.81.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	4,625,000,000
Current Cash	430,000,000
Current Liabilities	3,078,500,000
Current Debt	307,300,000
Non-Cash Working Capital (NCWC)	1,423,800,000
Change in NCWC	347,800,000
EBIT	2,134,600,000
Tax Provision	302,000,000
Depreciation and Amortization	828,300,000
Capital Expenditure	-481,900,000
Unlevered Free Cash Flow	2,421,464,476

Current Assets	5,330,500,000
Current Cash	1,483,600,000
Current Liabilities	2,782,900,000
Current Debt	12,000,000
Non-Cash Working Capital (NCWC)	1,076,000,000
Change in NCWC	-33,500,000
EBIT	3,329,100,000
Tax Provision	747,100,000
Depreciation and Amortization	940,000,000
Capital Expenditure	-460,400,000
Unlevered Free Cash Flow	2,979,712,694

Current Assets	5,125,400,000
Current Cash	1,320,800,000
Current Liabilities	3,078,500,000
Current Debt	383,400,000
Non-Cash Working Capital (NCWC)	1,109,500,000
Change in NCWC	698,000,000
EBIT	2,951,000,000
Tax Provision	662,100,000
Depreciation and Amortization	624,700,000
Capital Expenditure	-381,700,000
Unlevered Free Cash Flow	3,011,527,240

Current Assets	2,981,200,000
Current Cash	337,500,000
Current Liabilities	2,655,800,000
Current Debt	423,600,000
Non-Cash Working Capital (NCWC)	411,500,000
Change in NCWC	-136,100,000
EBIT	1,394,600,000
Tax Provision	280,000,000
Depreciation and Amortization	577,200,000
Capital Expenditure	-400,200,000
Unlevered Free Cash Flow	1,082,085,211

Current Assets	2,835,400,000
Current Cash	426,800,000
Current Liabilities	1,878,900,000
Current Debt	17,900,000
Non-Cash Working Capital (NCWC)	547,600,000
Change in NCWC	-189,700,000
EBIT	1,385,400,000
Tax Provision	384,400,000
Depreciation and Amortization	552,100,000
Capital Expenditure	-379,800,000
Unlevered Free Cash Flow	948,108,996

Current Assets	2,682,600,000
Current Cash	316,700,000
Current Liabilities	2,046,100,000
Current Debt	417,500,000
Non-Cash Working Capital (NCWC)	737,300,000
Change in NCWC	-29,700,000
EBIT	1,446,400,000
Tax Provision	-139,100,000
Depreciation and Amortization	533,200,000
Capital Expenditure	-312,900,000
Unlevered Free Cash Flow	1,637,000,000

Current Assets	2,478,700,000
Current Cash	433,600,000
Current Liabilities	1,827,600,000
Current Debt	549,500,000
Non-Cash Working Capital (NCWC)	767,000,000
Change in NCWC	97,000,000
EBIT	1,378,700,000
Tax Provision	372,300,000
Depreciation and Amortization	499,200,000
Capital Expenditure	-278,900,000
Unlevered Free Cash Flow	1,231,694,246

Current Assets	2,663,000,000
Current Cash	716,400,000
Current Liabilities	1,701,500,000
Current Debt	424,900,000
Non-Cash Working Capital (NCWC)	670,000,000
Change in NCWC	186,500,000
EBIT	1,126,800,000
Tax Provision	294,100,000
Depreciation and Amortization	457,800,000
Capital Expenditure	-255,800,000
Unlevered Free Cash Flow	1,062,640,691

Current Assets	1,692,700,000
Current Cash	580,000,000
Current Liabilities	976,300,000
Current Debt	347,100,000
Non-Cash Working Capital (NCWC)	483,500,000
Change in NCWC	79,800,000
EBIT	942,500,000
Tax Provision	314,100,000
Depreciation and Amortization	245,500,000
Capital Expenditure	-203,500,000
Unlevered Free Cash Flow	706,202,443

Current Assets	1,432,100,000
Current Cash	404,000,000
Current Liabilities	735,700,000
Current Debt	111,300,000
Non-Cash Working Capital (NCWC)	403,700,000
Change in NCWC	27,200,000
EBIT	1,029,600,000
Tax Provision	340,200,000
Depreciation and Amortization	230,100,000
Capital Expenditure	-202,200,000
Unlevered Free Cash Flow	702,142,201

Current Assets	1,391,800,000
Current Cash	466,800,000
Current Liabilities	1,028,500,000
Current Debt	480,000,000
Non-Cash Working Capital (NCWC)	376,500,000
Change in NCWC	112,900,000
EBIT	1,070,200,000
Tax Provision	359,400,000
Depreciation and Amortization	229,800,000
Capital Expenditure	-173,800,000
Unlevered Free Cash Flow	831,739,398

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