Amid a Graying Globe, We're Adding This Health Care Co. to the Bullpen
Lab Corp. is the newest member of the Action Alerts PLUS Bullpen.
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The developing world is going gray. And quickly.
The populations of the U.S., China, Japan, and the eurozone are all getting older. In the U.S., the percentage of folks 65 years and older is forecast to account for around 21% of the population by 2030, up from 16.9% in 2020. It's also the only age group who is expected to see its total percentage grow over those 10 years. Viewed from a different perspective, the 65-year-and-older cohort is expected to grow by 30% over the decade, while the three grow between very low single digits (Under 18, 18-44) or contract (45-64 years).
This demographic trend cuts to the heart of our Aging of the Population investment strategy, and it's why we are adding the shares of Lab Corp. LH to the Bullpen.
Folks who have elderly family members, recognize the evolving needs as people age. This includes an increasing number of medical tests -- blood glucose tests, pap smears, cholesterol tests, bone density tests and various tests to screen for cancers.
Our preliminary analysis of LH indicates a potential upside in shares to $235, but a downside risk to $198-$200, which suggests a net upside of around 4% from current levels. That isn't enough for us to buy yet. But Lab Corp's expected 2024 earnings per share growth of 6.9% is more than double that for Quest Diagnostics DGX . For now, we'll continue to dig deeper into Lab Corp's business and potential reasons why that expected EPS growth rate could be conservative.
At the time of publication, AAP had no position in any security mentioned.