Labcorp reaffirms long-term outlook following preliminary CMS payment rates
Labcorp Holdings reaffirms its 2026-2029 long-term outlook following preliminary Clinical Laboratory Fee Schedule payment rates from CMS.
Labcorp Holdings Inc. (LH) said Monday that it is reaffirming its 2026-2029 long-term financial outlook following the release of preliminary Clinical Laboratory Fee Schedule payment rates by the Centers for Medicare & Medicaid Services.
Key takeaways
- Reaffirms 2026-2029 long-term financial outlook announced on September 10, 2026.
- Compound annual revenue growth projected between 5% and 8% through 2029.
- Adjusted operating margin expansion targeted between 75 and 150 basis points by the end of 2029.
- Compound annual adjusted EPS growth expected between 8.5% and 11.5%.
Preliminary CMS payment rates and legislative response
The Centers for Medicare & Medicaid Services released preliminary Clinical Laboratory Fee Schedule payment rates applicable from 2027 through 2029 under the Protecting Access to Medicare Act, according to a regulatory filing. The company said the payment rates are based on data that is not fully representative of the broader commercial laboratory market and would impose steep annual payment cuts that threaten patient access to laboratory services. The company continues to support the bipartisan Reforming and Enhancing Sustainable Updates to Laboratory Testing Services Act, a legislative solution designed to ensure a sustainable and innovative U.S. laboratory system.
Reaffirmed long-term financial outlook
The company previously considered the anticipated continuation of reimbursement pressure under the Protecting Access to Medicare Act when developing its 2026-2029 long-term outlook announced at its Investor Day on September 10, 2026. The company reaffirmed that outlook in a filing, which includes compound annual revenue growth between 5% and 8%, adjusted operating margin expansion between 75 and 150 basis points by the end of 2029, compound annual adjusted EPS growth between 8.5% and 11.5%, and compound annual free cash flow growth in line with adjusted earnings growth.
Why it matters
The company stated that it is continuing to evaluate the preliminary payment rates and expects to provide additional information regarding their impact on 2027 financial guidance when that guidance is announced in February 2027. All other information from the September 10, 2026, Investor Day presentation is presented as of the dates indicated, according to the filing.
By the numbers
| Metric | Value | Source |
|---|---|---|
| Revenue growth (compound annual) | 5% to 8% | Form 8-K |
| Adjusted operating margin expansion | 75 to 150 basis points | Form 8-K |
| Adjusted EPS growth (compound annual) | 8.5% to 11.5% | Form 8-K |
Next steps for guidance and evaluation
Management is continuing to evaluate the preliminary rates released by the Centers for Medicare & Medicaid Services to understand the specific implications for operations across the 2027 through 2029 period. Additional updates and financial guidance for fiscal year 2027 will be provided by the company when that guidance is formally announced in February 2027.