Bear of the Day: Quest Diagnostics (DGX)


I last wrote about Quest Diagnostics (DGX) as a 'Bear of the Day' in February of this year. Since then, the stock has continued to occupy the cellar of the Zacks quantitative model, consistently holding a #4 (Sell) or #5 (Strong Sell) Rank.

And that should have been enough to keep investors away, unless they like trading a stock that has only treaded water between $55 and $63 and basically flat-lined for the year while the S&P is up over 20%.

This week, DGX dropped once again from a #4 to a #5 Rank and here are the analyst moves that made this happen...

The Quest for Earnings Growth

Quest Diagnostics is the leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its national network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff.

With a new high of $405 million in quarterly net income in their report last week, you would think that things were looking up for Quest. But the continued decline in the top line, along with an actual earnings miss, is what must have concerned analysts most.

Here's a strong visual of those downward EPS projections which say 'stay away.'

We need to see these EPS estimates reverse course before we can even entertain an investment or a trade in DGX shares.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.
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