Here's Why You Should Invest in Quest Diagnostics (DGX) Stock
Quest Diagnostics, Inc. DGX is progressing well with its two-point strategy that focuses on restoring growth and driving operational excellence.
In the past three months, the company’s shares have outperformed the industry. The stock has improved 17.5% compared with the industry’s 4.7% rise and the S&P 500’s 1.3% increase.
This leading provider of commercial laboratory services in North America has a market cap of $13.13 billion. The company has an expected earnings growth rate of 6.70% for the next three to five years.
Courtesy of impressive prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
Growth Acceleration Strategies Bode Well: Quest Diagnostics is moving ahead with its accelerating-growth strategies. During the first quarter, the company completed the purchase of a clinical laboratory services business of Boyce and Bynum, a provider of diagnostic and clinical laboratory services in the Midwest. Banking on its in-network status with UnitedHealthcare, Horizon Blue Cross Blue Shield of New Jersey and Blue Cross Blue Shield of Georgia, the company has already added 43 million customers. This represents about a billion-dollar opportunity for the company.
Strategy to Drive Operational Excellence on Track: In terms of efforts to ramp up operating efficiency, its Invigorate cost-cutting initiatives have been successful. Recently, the company stated that the construction of its new flagship laboratory in Clifton, NJ is underway.
Extended Partnership with UnitedHealthcare is Impressive: Management seems upbeat about its extended long-term strategic partnership agreement with UnitedHealthcare — a business of UnitedHealth Group — to operate as a preferred national laboratory for all of the company’s members starting Jan 1, 2019. With this, more than 48 million eligible members of UnitedHealth Group are getting in-network access to Quest Diagnostics’ complete portfolio of laboratory services.
Which Way are Estimates Treading?
For the second quarter of 2019, the Zacks Consensus Estimate for earnings is pegged at $1.70, which indicates 2.9% fall from the year-ago quarter’s figure. The same for revenues is pegged at $1.94 billion, calling for year-over-year growth of 1.3% from the prior-year quarter’s number.
The Zacks Consensus Estimate for 2019 earnings is pegged at $6.48, suggesting 2.7% year-over-year growth from the year-ago figure. The same for revenues is pegged at $7.69 billion, suggesting 2.2% rise from the prior-year number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Cerner Corporation CERN, Penumbra PEN and Bruker Corporation BRKR. While Cerner sports a Zacks Rank #1 (Strong Buy), Penumbra and Bruker carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cerner’s long-term earnings growth rate is expected to be 13.5%.
Penumbra’s long-term earnings growth rate is projected at 21.5%.
Bruker’s long-term earnings growth rate is estimated at 11.7%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Click to get this free report
Cerner Corporation (CERN): Free Stock Analysis Report
Bruker Corporation (BRKR): Free Stock Analysis Report
Penumbra, Inc. (PEN): Free Stock Analysis Report
Quest Diagnostics Incorporated (DGX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.