Results: Quest Diagnostics Incorporated Beat Earnings Expectations And Analysts Now Have New Forecasts

Quest Diagnostics Incorporated (NYSE:DGX) just released its latest first-quarter results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.5% to hit US$2.4b. Statutory earnings per share (EPS) came in at US$1.72, some 7.5% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Quest Diagnostics

Taking into account the latest results, Quest Diagnostics' 16 analysts currently expect revenues in 2024 to be US$9.45b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 3.2% to US$7.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.40b and earnings per share (EPS) of US$7.79 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$146, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Quest Diagnostics at US$160 per share, while the most bearish prices it at US$136. This is a very narrow spread of estimates, implying either that Quest Diagnostics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Quest Diagnostics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 5.2% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Quest Diagnostics is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Quest Diagnostics' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Quest Diagnostics analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Quest Diagnostics you should be aware of.

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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.