Earnings Update: Quest Diagnostics Incorporated (NYSE:DGX) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Quest Diagnostics Incorporated (NYSE:DGX) had a good week, as its shares rose 6.1% to close at US$158 following the release of its quarterly results. It was a workmanlike result, with revenues of US$2.5b coming in 2.6% ahead of expectations, and statutory earnings per share of US$1.99, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Quest Diagnostics after the latest results.

See our latest analysis for Quest Diagnostics

Taking into account the latest results, the most recent consensus for Quest Diagnostics from 16 analysts is for revenues of US$10.5b in 2025. If met, it would imply a notable 10% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 17% to US$8.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$10.3b and earnings per share (EPS) of US$8.75 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of US$166, suggesting the analysts are focused on earnings as the driver of value creation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Quest Diagnostics, with the most bullish analyst valuing it at US$185 and the most bearish at US$145 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Quest Diagnostics' growth to accelerate, with the forecast 8.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Quest Diagnostics is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that Quest Diagnostics will grow in line with the overall industry. The consensus price target held steady at US$166, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Quest Diagnostics going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Quest Diagnostics .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.