Quest Diagnostics Delivers Strong Results Amid Mixed Market Performance
With a market cap of $18.3 billion, Secaucus, New Jersey-based Quest Diagnostics Incorporated (DGX) stands out as a major player in diagnostic testing and related services globally. The company provides a diverse array of clinical testing and healthcare IT solutions through its extensive network of laboratories and service centers.
Stock Performance: Mixed Results Over Time
Over the past 52 weeks, shares of Quest Diagnostics have lagged behind the broader market. While DGX has seen a rise of 19.9%, the S&P 500 Index ($SPX) has surged 31.3%. In the year-to-date (YTD), shares of DGX have increased by 17.8%, a performance overshadowed by the SPX’s 25.5% YTD gain.
In contrast, DGX has surpassed the Health Care Select Sector SPDR Fund’s (XLV) 10.9% increase over the past year and a 6.6% gain YTD.
On October 22, shares of Quest Diagnostics rose by 6.9% following the company’s report of a better-than-expected Q3 2024 adjusted EPS of $2.30 and revenue of $2.5 billion. Diagnostic Information Services revenues climbed 8.9% to $2.4 billion, fueled by a 5.5% rise in requisition volumes and a 3.3% increase in revenue per requisition. Additionally, the company revised its 2024 guidance, now predicting full-year revenues will range from $9.80 billion to $9.85 billion, and reaffirmed its adjusted EPS forecast of $8.85 – $8.95.
For the fiscal year ending December, analysts anticipate a 2.2% year-over-year growth in DGX’s EPS to $8.90. The company has a strong track record, having beaten consensus estimates in the last four quarters.
Analysts Show Confidence in DGX
Among the 16 analysts covering Quest Diagnostics, the overall consensus rating is a “Moderate Buy,” which reflects seven “Strong Buy” ratings and nine “Holds.” This outlook is slightly more optimistic than it was three months ago when the stock had six “Strong Buy” ratings.
Analyst Target Upgraded Following Strong Performance
On October 23, Citi analyst Patrick Donnelly raised the price target on Quest Diagnostics to $185, noting the successful integration of LifeLabs, positive utilization trends, and the company’s resilient positioning in a politically charged environment.
As of now, DGX is trading below the average price target of $171.50. The highest target on the Street is set at $215, which suggests a potential upside of 32.4% from its current price.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any securities mentioned in this article. All information and data are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
