Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

COVID-19 Tests a Boon for Quest Diagnostics

Stock MarketsSep 19, 2021 09:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. COVID-19 Tests a Boon for Quest Diagnostics

Shares of Quest Diagnostics Inc (DGX) were trading at around $154.77 apiece at close on Friday, September 17, outperforming the Health Care Select Sector SPDR (XLV) $132.35, by more than 10% so far this year.

The shares have a good likelihood to increase further over the upcoming twelve months. The triggering catalyst looks to be strong enough to continue to outpace the sector. So, I am bullish regarding this stock.

Based in Secaucus, New Jersey, Quest Diagnostics Incorporated (NYSE:DGX) develops diagnostic information services that it then provides to patients, various healthcare professionals, and hospitals located in the United States and internationally. (See DGX stock charts on TipRanks)

From the Second Quarter Report

The return to normal life after a period of restrictions and other measures to prevent the spread of the COVID-19 virus had a positive impact on the financials of Quest in the second quarter of 2021. People were allowed again to access the healthcare system services, and the company could restart doing business, reaching new laboratory management agreements with more hospitals.

Thus, the adjusted diluted EPS jumped nearly 124% year-over-year to $3.18 versus the consensus average of $2.86, on total revenues of approximately $2.55 billion. The top line item grew more than 39% year-over-year and topped projections by $170 million.

Furthermore, the operating activities produced a higher cash flow of $460 million in the second quarter, exceeding that for the analogous period of 2020 by a little more than 30%.

Market Prospects

In the short run, the demand for tests to detect the infection from the COVID-19 virus should remain robust, providing Quest Diagnostics with an additional source of income.

This is because the number of infections from the Delta variant is expected to increase in the upcoming weeks. People coming back from holidays, the ending of the restrictions, and the ability of the virus to mutate into new variants are the main factors.

With its strong presence in the territory, serving fifty percent of physicians and hospitals operating in the United States every year, the company is well-armed to take advantage of a situation, which, according to Statista, is seeing the United States perform the highest number of tests for COVID-19 from any country in the world.

Statista adds that as of Sept. 17, 2021, healthcare operators have performed about 615 million tests in the U.S., while the Institute for Health Metrics and Evaluation (IHME) projects that the number of tests will exceed 800 million before the end of 2021.

Looking Ahead to Full Year 2021

Quest Diagnostics forecasts that the adjusted diluted EPS will be between $11.65 and $12.35, compared to the consensus average of $11.59. Additionally, Quest estimates that the operating cash flow will reach $2 billion in 2021.

Wall Street’s Take

In the last 3 months, nine Wall Street analysts issued a 12-month price target for Quest Diagnostics Inc. The average Quest Diagnostics Inc price target is $162.22, implying a 4.8% upside. The analyst rating consensus is a Moderate Buy rating, based on 6 Buy, 3 Hold and zero Sell ratings.

Summary

There is a good likelihood the stock will continue to outperform the overall market, as the business lies on solid fundamentals. In the near term, it will benefit from the expected rise in the demand for the COVID-19 molecular tests.

Disclosure: At the time of publication, Alberto Abaterusso did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

COVID-19 Tests a Boon for Quest Diagnostics
 

Related Articles

GE mandates COVID-19 vaccines for U.S. workers
GE mandates COVID-19 vaccines for U.S. workers By Reuters - Oct 19, 2021

CHICAGO (Reuters) - General Electric (NYSE:GE) Co has asked its U.S.-based workers to get COVID-19 shots or seek a medical or religious accommodation by Dec. 8 in order to...

The battle for British supermarket group Morrisons
The battle for British supermarket group Morrisons By Reuters - Oct 19, 2021

(Reuters) - Shareholders in Morrisons, Britain's fourth-largest supermarket group, on Tuesday approved a 7 billion pound ($9.7 billion) agreed takeover by U.S. private equity firm...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email