LH – Market expectations are for Uniform ROA to decline to record lows, but management is confident about growth, margins, and free cash flow

• Laboratory Corporation of America (LH:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 21.5x Uniform P/E. At these levels, markets have bearish expectations for the firm, but management is confident about their revenue growth, margin expansion, and free cash flow
  
  

• Specifically, management is confident they expect a 3% revenue growth rate in 2020 when excluding unusual items, that their free cash flow improved from $926mn in 2018 to $1.04bn, and that they expect margins to improve again. In addition, they are confident they expect Covance organic revenue growth to range in the mid- to high single-digits both with and without pass-throughs