Fortrea Holdings Inc
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$19.30 | Zlbzlp | Wvbqzqpgb |
Fortrea: Despite Headwinds, Shares Undervalued for Long-Term Investors; $35.50 Fair Value Estimate
We have launched coverage of Fortrea, a global contract research organization, or CRO, which was created after LabCorp spun off its clinical development business in June 2023. LabCorp had entered the CRO space through its acquisition of Covance in 2015 for $6.1 billion. We assign Fortrea a fair value estimate of $35.50 per share, and it's currently trading in 4-star territory about 19% below our fair value estimate. We believe Fortrea has a narrow economic moat based on its significant late-stage clinical trial exposure, regulatory expertise, and strong client relationships, which are supported by intangible assets and high switching costs.