Quest Diagnostics (DGX) Upgraded to Hold by Zacks Investment Research

Zacks Investment Research upgraded shares of Quest Diagnostics (NYSE:DGX) from a sell rating to a hold rating in a research note released on Monday morning.

According to Zacks, “Quest Diagnostics exited the fourth quarter on a sluggish note. A decline in Diagnostic information services revenues was also disappointing. We are concerned about factors like unfavorable changes in prescription drug monitoring, vitamin D and hepatitis C testing marketplace that can dent growth going forward. Also, a rise in patient concession along with certain reserve adjustments impacted the top line, resulting in a decline in revenue per requisition. Tough competition and reimbursement issues are other concerns. On a brighter note, Quest Diagnostics is refocusing on diagnostic information services wing and disciplined capital deployment. The company’s’ acquisitions and collaborations with hospitals and integrated delivery networks continue to act as major growth drivers. We are upbeat about the company’s strategic partnership with UnitedHealthcare. Overall, in the past three months, the company underperformed its industry.”

Get Quest Diagnostics alerts:

DGX has been the topic of several other research reports. Morgan Stanley cut their target price on Quest Diagnostics from $120.00 to $107.00 and set an overweight rating on the stock in a research note on Friday, November 30th. ValuEngine raised Quest Diagnostics from a sell rating to a hold rating in a research note on Wednesday, January 2nd. Goldman Sachs Group cut their target price on Quest Diagnostics from $110.00 to $90.00 and set a neutral rating on the stock in a research note on Sunday, December 9th. Credit Suisse Group reaffirmed a buy rating and set a $121.00 target price on shares of Quest Diagnostics in a research note on Sunday, December 2nd. Finally, Bank of America downgraded Quest Diagnostics from a neutral rating to an underperform rating in a research note on Thursday, January 3rd. Two research analysts have rated the stock with a sell rating, ten have given a hold rating and nine have given a buy rating to the company. Quest Diagnostics has a consensus rating of Hold and a consensus price target of $102.82.

Shares of NYSE DGX opened at $87.81 on Monday. The company has a market capitalization of $11.98 billion, a P/E ratio of 13.92, a P/E/G ratio of 2.06 and a beta of 0.89. Quest Diagnostics has a 12-month low of $78.95 and a 12-month high of $116.49. The company has a debt-to-equity ratio of 0.65, a quick ratio of 0.87 and a current ratio of 0.94.

Quest Diagnostics (NYSE:DGX) last announced its earnings results on Thursday, February 14th. The medical research company reported $1.36 earnings per share for the quarter, missing the consensus estimate of $1.37 by ($0.01). The business had revenue of $1.84 billion for the quarter, compared to the consensus estimate of $1.88 billion. Quest Diagnostics had a net margin of 9.77% and a return on equity of 15.23%. The firm’s revenue was down 1.4% on a year-over-year basis. During the same period in the previous year, the firm earned $1.40 EPS. On average, research analysts forecast that Quest Diagnostics will post 6.45 earnings per share for the current year.

The company also recently declared a quarterly dividend, which was paid on Wednesday, January 30th. Stockholders of record on Tuesday, January 15th were given a dividend of $0.53 per share. The ex-dividend date was Monday, January 14th. This is a boost from Quest Diagnostics’s previous quarterly dividend of $0.50. This represents a $2.12 annualized dividend and a dividend yield of 2.41%. Quest Diagnostics’s dividend payout ratio (DPR) is 33.60%.

Hedge funds have recently modified their holdings of the company. Legacy Financial Advisors Inc. acquired a new position in shares of Quest Diagnostics during the 4th quarter valued at $45,000. Benjamin F. Edwards & Company Inc. increased its position in shares of Quest Diagnostics by 32.7% during the 4th quarter. Benjamin F. Edwards & Company Inc. now owns 544 shares of the medical research company’s stock valued at $45,000 after purchasing an additional 134 shares during the period. Doyle Wealth Management acquired a new position in shares of Quest Diagnostics during the 4th quarter valued at $48,000. Spectrum Management Group Inc. acquired a new position in shares of Quest Diagnostics during the 4th quarter valued at $58,000. Finally, Pearl River Capital LLC acquired a new position in shares of Quest Diagnostics during the 4th quarter valued at $60,000. Institutional investors own 85.73% of the company’s stock.

About Quest Diagnostics

Quest Diagnostics Incorporated provides diagnostic testing information and services in the United States and internationally. The company's Diagnostic Information Services business segment develops and delivers diagnostic testing information and services, such as routine testing, non-routine and advanced clinical testing, gene-based and esoteric testing, anatomic pathology, and other diagnostic information services.

Further Reading: Cost of Goods Sold (COGS)

Get a free copy of the Zacks research report on Quest Diagnostics (DGX)

For more information about research offerings from Zacks Investment Research, visit Zacks.com