Quest Diagnostics (NYSE:DGX) Sets New 12-Month High - Still a Buy?

Key Points

• Quest Diagnostics reached a new 52-week high, trading as high as $249.73, while analysts maintained a generally positive outlook. The stock carries a “Moderate Buy” consensus rating and a $248.70 average price target.
• The company exceeded quarterly expectations, reporting $3.00 in earnings per share versus the $2.87 consensus estimate and $3.10 billion in revenue. Revenue increased 10% year over year.
• Quest Diagnostics pays a quarterly dividend of $0.86 per share, equivalent to a $3.44 annualized payout and a 1.4% yield. Institutional investors own 88.06% of the company, although the CEO and a senior vice president recently sold shares through pre-arranged trading plans.

Quest Diagnostics Incorporated (NYSE:DGX - Get Free Report)'s share price reached a new 52-week high on Wednesday. The stock traded as high as $249.73 and last traded at $244.6820, with a volume of 318,313 shares trading hands. The stock had previously closed at $242.56.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on the stock. Mizuho lifted their target price on shares of Quest Diagnostics from $235.00 to $260.00 and gave the company an "outperform" rating in a research note on Friday, July 24th. Wall Street Zen raised shares of Quest Diagnostics from a "hold" rating to a "buy" rating in a research note on Tuesday, July 28th. Robert W. Baird set a $262.00 price objective on Quest Diagnostics in a report on Friday, October 23rd. Barclays boosted their target price on Quest Diagnostics from $250.00 to $260.00 and gave the company an "overweight" rating in a research note on Wednesday, October 7th. Finally, Weiss Ratings raised Quest Diagnostics from a "buy (a)" rating to a "buy (a+)" rating in a research report on Wednesday, October 21st. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $248.70.

Quest Diagnostics Price Performance

The company has a debt-to-equity ratio of 0.70, a current ratio of 1.70 and a quick ratio of 1.58. The stock has a market capitalization of $27.17 billion, a price-to-earnings ratio of 24.52, a PEG ratio of 2.17 and a beta of 0.54. The stock's 50 day simple moving average is $237.93 and its 200-day simple moving average is $210.94.

Quest Diagnostics (NYSE:DGX - Get Free Report) last announced its quarterly earnings results on Thursday, October 22nd. The medical research company reported $3.00 EPS for the quarter, topping the consensus estimate of $2.87 by $0.13. The company had revenue of $3.10 billion for the quarter, compared to analyst estimates of $3.05 billion. Quest Diagnostics had a net margin of 9.53% and a return on equity of 16.21%. Quest Diagnostics's quarterly revenue was up 10.0% on a year-over-year basis. During the same quarter in the prior year, the business posted $2.60 EPS. On average, analysts expect that Quest Diagnostics Incorporated will post 11.30 EPS for the current fiscal year.

Quest Diagnostics Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Wednesday, October 21st. Shareholders of record on Tuesday, October 6th were given a dividend of $0.86 per share. This represents a $3.44 annualized dividend and a yield of 1.4%. The ex-dividend date of this dividend was Tuesday, October 6th. Quest Diagnostics's dividend payout ratio is presently 34.26%.

Insider Activity

In other Quest Diagnostics news, SVP Michael Prevoznik sold 22,677 shares of the business's stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $243.11, for a total value of $5,513,005.47. Following the completion of the sale, the senior vice president owned 37,557 shares of the company's stock, valued at $9,130,482.27. The trade was a 37.65% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO J. Davis sold 10,000 shares of the company's stock in a transaction dated Tuesday, September 1st. The stock was sold at an average price of $242.72, for a total value of $2,427,200.00. Following the sale, the chief executive officer owned 122,423 shares of the company's stock, valued at approximately $29,714,510.56. This trade represents a 7.55% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.88% of the stock is owned by company insiders.

Institutional Investors Weigh In On Quest Diagnostics

Several institutional investors and hedge funds have recently added to or reduced their stakes in DGX. BlackRock Inc. acquired a new position in Quest Diagnostics during the second quarter valued at approximately $1,965,923,000. EdgePoint Investment Group Inc. boosted its holdings in shares of Quest Diagnostics by 35.1% during the 1st quarter. EdgePoint Investment Group Inc. now owns 2,243,869 shares of the medical research company's stock worth $439,753,000 after buying an additional 582,797 shares during the period. Bank of America Corp DE acquired a new position in Quest Diagnostics in the 2nd quarter valued at $410,151,000. Dimensional Fund Advisors LP grew its stake in Quest Diagnostics by 0.9% in the 1st quarter. Dimensional Fund Advisors LP now owns 1,949,535 shares of the medical research company's stock valued at $382,085,000 after buying an additional 17,987 shares during the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its holdings in Quest Diagnostics by 11.3% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 942,407 shares of the medical research company's stock worth $199,743,000 after acquiring an additional 95,804 shares during the period. 88.06% of the stock is currently owned by institutional investors and hedge funds.

About Quest Diagnostics

Quest Diagnostics Incorporated NYSE: DGX is a provider of diagnostic information services. The company performs laboratory testing that helps physicians, hospitals and other healthcare providers diagnose, treat and monitor diseases and health conditions. Its services include routine blood and other specimen testing, pathology, molecular and genetic testing, and specialized diagnostic services.

Quest Diagnostics serves a broad range of customers, including hospitals, physician practices, health plans, employers, government agencies and individual consumers.

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