Quest Diagnostics: Strong Q1 Performance and Positive Outlook Support Buy Rating

William Blair analyst Andrew Brackmann has reiterated their bullish stance on DGX stock, giving a Buy rating on April 14.

Andrew Brackmann has given his Buy rating due to a combination of factors including Quest Diagnostics’ strong first-quarter performance and positive future outlook. The company reported revenue and earnings slightly above consensus, with total revenue reaching $2.65 billion, marking a 12% year-over-year increase. This growth was primarily driven by the Diagnostic Information Services segment, which benefited from favorable pricing dynamics despite a slight decline in organic requisition volume. Operating margins also exceeded expectations, contributing to the earnings per share beat.
Looking forward, Quest Diagnostics reaffirmed its full-year guidance for revenue and adjusted EPS, with expectations of organic revenue growth accelerating to around 3% for the year. The company is expected to benefit from expanding operating margins, prudent utilization assumptions, and a favorable regulatory environment. Additionally, Quest’s strong position in the U.S. market and minimal impact from macroeconomic factors further support the Buy rating. The stock’s valuation at 17 times 2025 earnings suggests potential for future growth, aligning with the analyst’s positive outlook.

In another report released on April 14, Bank of America Securities also maintained a Buy rating on the stock with a $198.00 price target.

Based on the recent corporate insider activity of 100 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DGX in relation to earlier this year.