2024-07-28 05:40:15 ET
Summary
- Quest Diagnostics reported Q2 earnings beat on EPS and revenue, with 9.5% year-over-year revenue growth.
- Company's acquisitions and focus on expanding clinical services are key growth drivers.
- Despite strong earnings, risks include economic downturn, inflation pressures, and regulatory challenges.
- I provide my viewpoints on the quarter, and how I plan on managing my DGX position in the near-term.
In my previous analysis of Quest Diagnostics ( DGX ), I examined their Q2 2023 earnings report, which produced a slight beat on EPS and revenue. The company did report a slight decline in COVID-related revenues, however, they were able to log a 9.5% year-over-year growth in revenue. At that time, I believed that Quest's efforts in expanding its clinical services, and amassing acquisitions, were going to lead to additional growth. As a result, I was bullish on DGX, especially considering Quest’s healthy dividend and their market leadership. It has been about 11 months since that article was published, and DGX has finally broken out of its downtrend for the all-time high and was showing a bullish setup ahead of the company’s Q2 earnings . Quest was able to beat the Street’s expectations for both EPS and revenue. Yet, the market punished DGX at the opening bell with the ticker bouncing off the uptrend ray around $138.71. I believe the market's initial reaction was transitory, and the company has plenty of growth drivers to encourage a bullish sentiment....
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Quest Diagnostics: Beat Down After Beating Q2 Estimates