Will Quest Diagnostics (DGX) Miss Earnings Estimates? - Analyst Blog
April 21 2014 - 3:50PM
Zacks
Quest Diagnostics
Inc. (DGX) is scheduled to report its first-quarter 2014
results before the opening bell on Apr 24. Last quarter, Quest
Diagnostics posted a positive earnings surprise of 9.57%. Let’s see
how things are shaping up for this announcement.
Factors at
Play
Barring the fourth quarter of 2013,
Quest Diagnostics delivered negative earnings surprises in the
remaining three quarters of 2013 with an average miss of 2.38%.
Quest Diagnostics is continuously
witnessing challenges with testing volume. Moreover, lower
healthcare utilization and reimbursement pressure from the
government and other payers continue to pose threats. Concerns also
include a poor 2014 revenue outlook provided earlier, indicating
that the industry trend does not seem likely to improve in the near
future.
Although we hold a favorable view
on the company’s massive organizational restructuring strategy
implemented since Jan 2013 to increase operational efficiency and
restore growth, near-term visibility remains poor.
Quest Diagnostics nonetheless has
been focusing on high-potential areas such as gene-based esoteric
testing for cancer, cardiovascular disease, infectious disease and
neurological disorders.
Earnings
Whispers?
Our proven model does not
conclusively show that Quest Diagnostics is likely to beat earnings
this quarter. It is because a stock needs to have both a positive
Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2
or 3 for this to happen. That is not the case here as you will see
below.
Zacks ESP:
Earnings ESP for Quest Diagnostics is -4.49%, since the Most
Accurate estimate of $0.85 stands below the Zacks Consensus
Estimate of $0.89.
Zacks Rank:
AlthoughQuest Diagnostics’ Zacks Rank #2
(Buy)increases the predictive power of ESP, when combined with a
-4.49% ESP, it makes surprise prediction difficult.
Other Stocks to
Consider
Here are some other companies
having the right combination of elements, i.e., a positive Zacks
Earnings ESP and a Zacks Rank #1, #2 or #3 and hence, worth a
look.
Align Technology
Inc. (ALGN) has an Earnings ESP of +13.89% and holds a
Zacks Rank #1 (Strong Buy). Align is expected to report first
quarter 2014 earnings on Apr 23.
Myriad Genetics
Inc. (MYGN) has an Earnings ESP of +10.87% and holds a
Zacks Rank #1 (Strong Buy). Myriad Genetics will be reporting first
quarter 2014 earnings on May 6.
Cardinal Health,
Inc. (CAH) has an Earnings ESP of +1.00% and holds a Zacks
Rank #2. Cardinal Health will report third quarter fiscal 2014
earnings on May 1.
ALIGN TECH INC (ALGN): Free Stock Analysis Report
CARDINAL HEALTH (CAH): Free Stock Analysis Report
QUEST DIAGNOSTC (DGX): Free Stock Analysis Report
MYRIAD GENETICS (MYGN): Free Stock Analysis Report
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