We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Quest Diagnostics (DGX) is a Suitable Pick for Investors
Read MoreHide Full Article
Madison, NJ-based Quest Diagnostics, Inc. (DGX - Free Report) , a provider of commercial laboratory services, has been on a growth trajectory of late. It has rallied 35.4% over the past one year, ahead of the S&P 500’s 15.5% gain. The stock has a market cap of $14.92 billion.
Also, the company has gained 11%, better than the Zacks categorized Medical - Outpatient and Home Healthcare sub-industry's gain of 4.6% in the last three months.
Notably, Quest Diagnostics’ current year estimate revision trend is favorable. Over the past 60 days, three analysts have raised their earnings estimates, with no movement in the opposite direction. The magnitude of estimate revision increased around 1% to $5.56 per share over the same time frame. The company has a trailing four-quarter average positive earnings surprise of 5.2%.
With strong growth prospects, this Zacks Rank #2 (Buy) company is an attractive pick at present.
We note that, management’s 2017 guidance is based on new and extended two-point strategy to generate shareholder value – accelerating growth and driving operational excellence. Lately, the company has raised its outlook for revenue growth for the period 2017–2020 to 3–5%. Earnings for the same period are expected to grow faster than revenues in the mid-to-high single digit range.
Presently, the company has partnered with a number of other heath care players. These include the latest tie-up with Safeway and HealthOne Systems of HCA Healthcare. Other recent alliances include Quintiles, a leading provider of biopharmaceutical development and commercial outsourcing services, Memorial Sloan-Kettering, the University of California and the latest professional lab services relationship with Barnabas Health.
Meanwhile,Quest Diagnostics has been focusing on areas with high potential such as gene-based esoteric testing for cancer, cardiovascular disease, infectious disease and neurological disorders. The company recently announced the launch of a test service that helps physicians evaluate patient response to drug therapy used to treat infection with hepatitis B virus. This is the first test of its kind available in the U.S. Management is currently on track to open a total of 200 patient service centers in Safeway stores by the end of 2017.
Management also announced agreements to acquire two laboratory businesses in Lewisville, Texas, namely Med Fusion and Clear Point. The businesses jointly provide a complete range of cancer diagnostic services to physicians and provider networks. We expect this deal to boost Quest Diagnostics’ growth in the cancer diagnostic segment.
However, downside may come from the current market environment which remains challenging for Quest Diagnostics in the form of continued decline in healthcare utilization rate, commercial pricing pressure and reimbursement headwind. Additionally, the company faces intense competition from hospital-affiliated labs primarily on the basis of quality of service.
Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 33% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 28% over the last three months.
Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has gained roughly 30.1% over the last three months.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Quest Diagnostics (DGX) is a Suitable Pick for Investors
Madison, NJ-based Quest Diagnostics, Inc. (DGX - Free Report) , a provider of commercial laboratory services, has been on a growth trajectory of late. It has rallied 35.4% over the past one year, ahead of the S&P 500’s 15.5% gain. The stock has a market cap of $14.92 billion.
Also, the company has gained 11%, better than the Zacks categorized Medical - Outpatient and Home Healthcare sub-industry's gain of 4.6% in the last three months.
Notably, Quest Diagnostics’ current year estimate revision trend is favorable. Over the past 60 days, three analysts have raised their earnings estimates, with no movement in the opposite direction. The magnitude of estimate revision increased around 1% to $5.56 per share over the same time frame. The company has a trailing four-quarter average positive earnings surprise of 5.2%.
With strong growth prospects, this Zacks Rank #2 (Buy) company is an attractive pick at present.
We note that, management’s 2017 guidance is based on new and extended two-point strategy to generate shareholder value – accelerating growth and driving operational excellence. Lately, the company has raised its outlook for revenue growth for the period 2017–2020 to 3–5%. Earnings for the same period are expected to grow faster than revenues in the mid-to-high single digit range.
Presently, the company has partnered with a number of other heath care players. These include the latest tie-up with Safeway and HealthOne Systems of HCA Healthcare. Other recent alliances include Quintiles, a leading provider of biopharmaceutical development and commercial outsourcing services, Memorial Sloan-Kettering, the University of California and the latest professional lab services relationship with Barnabas Health.
Meanwhile,Quest Diagnostics has been focusing on areas with high potential such as gene-based esoteric testing for cancer, cardiovascular disease, infectious disease and neurological disorders. The company recently announced the launch of a test service that helps physicians evaluate patient response to drug therapy used to treat infection with hepatitis B virus. This is the first test of its kind available in the U.S. Management is currently on track to open a total of 200 patient service centers in Safeway stores by the end of 2017.
Management also announced agreements to acquire two laboratory businesses in Lewisville, Texas, namely Med Fusion and Clear Point. The businesses jointly provide a complete range of cancer diagnostic services to physicians and provider networks. We expect this deal to boost Quest Diagnostics’ growth in the cancer diagnostic segment.
However, downside may come from the current market environment which remains challenging for Quest Diagnostics in the form of continued decline in healthcare utilization rate, commercial pricing pressure and reimbursement headwind. Additionally, the company faces intense competition from hospital-affiliated labs primarily on the basis of quality of service.
Other Key Picks
Other top-ranked medical stocks are Align Technology, Inc. (ALGN - Free Report) , Inogen, Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc. (AXDX - Free Report) . Notably, Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 33% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 28% over the last three months.
Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has gained roughly 30.1% over the last three months.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>