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Here's Why You Should Sweep Up Quest Diagnostics Right Now

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Quest Diagnostics Incorporated (DGX - Free Report) has rallied 4.7% over the last year, outperforming the industry's decline of 5.6%. The stock has a market cap of $13.5 billion.The company’s five-year historical growth rate is also favorable at 6.7% compared with 2.8% of the S&P 500 index.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick at present. Let’s find out whether the recent positive trend is a sustainable one.

The company has a positive earnings surprise of 6.8% for the last four quarters. Also, it has a long-term expected earnings growth rate of 8.4%.

 

 

The current estimate revision trend is favorable. For the current year, 10 estimates moved north compared with no movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for the full year has risen 11.5% to $6.40 per share.

The market is upbeat about the company’s recently reported fourth-quarter results. The year-over-year increase in adjusted earnings and revenues is encouraging. The companyis also refocusing on its core diagnostic information services business and working on disciplined capital deployment.

Also, investors are looking forward to Quest Diagnostics’ recently-announced definitive agreement to buy a leading national provider of home-based health risk assessments and related services — Mobile Medical Examination Service. The deal is slated to close in the first quarter of 2018.

Moreover, last December, Quest Diagnostics completed the buyout of Shiel Medical Laboratory from Fresenius Medical Care (FMS - Free Report) — a healthcare company working on renal and other chronic conditions. The Shiel lab specifically serves the New York-New Jersey area. The latest development is expected to drive Quest Diagnostics’ operational excellence. The takeover is expected to expand the company’s patient service center network in the area.

Other Key Picks

A couple of top-ranked stocks in the broader medical sector are PerkinElmer and Bio-Rad Laboratories (BIO - Free Report) .

Bio-Rad Laboratories has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company has a long-term expected earnings growth rate of 25%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

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