Why Quest Diagnostics (DGX) is a Top Value Stock for the Long-Term

Quest Diagnostics (DGX) is highlighted as a potential value stock based on Zacks Rank and Style Scores, despite a Hold rating. The company possesses a Value Style Score of B with a forward P/E ratio of 17.87, and four analysts have increased fiscal year 2025 earnings estimates in the last 60 days, raising the consensus estimate to $9.70 per share.

Analysis

Quest Diagnostics (DGX), a significant provider of diagnostic information services catering to physicians, hospitals, and consumers across the United States, currently holds a Zacks Rank #3 (Hold). Despite this neutral ranking, the company exhibits appealing characteristics for value-focused investors, as indicated by its VGM Score of B and a Value Style Score of B. This value proposition is supported by an attractive forward P/E ratio of 17.87. Further positive sentiment is evidenced by recent analyst activity; four analysts have upwardly revised their earnings estimates for fiscal 2025 over the past 60 days. Consequently, the Zacks Consensus Estimate for fiscal 2025 earnings per share has increased by $0.01 to $9.70. Additionally, DGX has demonstrated a consistent history of outperforming expectations, reporting an average earnings surprise of 2%. The combination of a solid Zacks Rank, even at Hold, with top-tier B ratings for Value and VGM, positions DGX as a noteworthy stock for potential long-term value.

Key Decisions for Investors

• Investors focused on value metrics should consider Quest Diagnostics for their watchlist, given its B-rated Value and VGM Style Scores combined with a forward P/E of 17.87, despite its current Zacks #3 (Hold) classification.
• Monitor upcoming earnings reports and further analyst estimate revisions for DGX, as continued positive earnings surprises and upward revisions in consensus estimates could signal strengthening fundamentals and potentially lead to a more favorable Zacks Rank.
• While the 'Hold' rank suggests a neutral short-term outlook according to the Zacks model, the positive Style Scores imply that DGX possesses characteristics that could lead to outperformance, warranting careful consideration for portfolios emphasizing value.