Quest Diagnostics Incorporated

McKesson reported second-quarter revenues of $105.4 billion, up 7.7% year over year and 1.2% above analyst expectations, while its stock remained flat at $868.87. Among the 39 healthcare providers and services stocks tracked, aggregate revenues beat consensus by 1.7% and next-quarter guidance came in 1.6% above estimates, yet the group's average share price fell 1.2% since earnings. CVS Health posted the best quarter with revenues of $106.1 billion, up 7.3% and 6.7% above expectations, but its stock dropped 9.1% to $94.90. AdaptHealth was the weakest performer, missing revenue estimates by 12.6% with revenues of $740.3 million and issuing significantly lower full-year revenue and EBITDA guidance, sending its stock down 46.2% to $5.83. Elevance Health reported flat revenues of $49.83 billion, beating estimates by 2.5%, but lost 469,000 customers and saw its stock fall 7.4% to $395.18, while Quest Diagnostics grew revenues 10.2% to $3.04 billion and its stock rose 12.6% to $236.32.

Quest Diagnostics raised its full year 2026 revenue and earnings guidance while reporting second quarter results that showed higher sales and net income versus the prior year. The stock has returned 34.48% year to date and 37.26% over one year, closing at $233.72. A widely followed narrative fair value estimate places the shares at $239.38, implying a modest undervaluation of about 2.4%. The narrative highlights the company's role as a lab engine for consumer wellness brands and the rising importance of health data analytics as drivers of long-term earnings power, though risks remain from potential PAMA reimbursement tightening and margin pressure from higher wage and technology costs.

Quest Diagnostics shares rose more than 8% last week after the medical testing leader boosted its full-year sales and profit forecast. Second-quarter revenue jumped 10% year over year to $3 billion, driven by partnerships with Corewell Health and Fresenius Medical Care, along with gains in its direct-to-consumer business and wellness-related sales. Adjusted earnings per share leaped 19% to $3.12, aided by automation and AI investments that improved lab efficiency. Management now projects full-year revenue of roughly $12 billion and adjusted earnings per share of $11.05 to $11.25.

Analysts have lifted their Fair Value estimate for Quest Diagnostics from $223.44 to $239.38 following the company's second-quarter earnings beat and raised full-year guidance. The adjustment reflects updated models incorporating a revenue beat of 2% to $3.04 billion and an earnings per share beat of $0.30 versus Street expectations, along with higher revenue and earnings guidance. Bullish firms including BofA, Mizuho, Jefferies, and Barclays raised price targets into a $245 to $265 range, citing strong organic growth and sustained momentum, while UBS lifted its target to $232 but maintained a Neutral rating, flagging softer margins. Key changes in the Fair Value model include a slight decrease in revenue growth from 4.88% to 4.74%, an increase in profit margin from 10.67% to 11.01%, and a lower forward P/E from 21.17x to 20.92x.

Quest Diagnostics shares reached a new 52-week high of $216.87, gaining 11.5% over the past month and 24.5% year-to-date. The company reported first-quarter earnings of $2.50 per share, surpassing the consensus estimate of $2.37, and beat revenue expectations by 3.14%. For the current fiscal year, analysts project earnings of $10.72 per share on $11.84 billion in revenues, representing 8.83% EPS growth. The stock carries a Zacks Rank of 2, or Buy, supported by positive earnings estimate revisions, and a VGM Score of B. Industry peer Aveanna Healthcare Holdings also holds a Zacks Rank of 2 and has seen its shares rise 30.7% over the past month.

Quest Diagnostics is scheduled to announce its fiscal second quarter 2026 results before the market opens on Thursday, July 23. Analysts expect the company to report an adjusted earnings per share of $2.81, up 7.3% from $2.62 in the same quarter last year. The company has surpassed Wall Street's bottom-line estimates in the past four quarterly reports. For the full fiscal year 2026, analysts forecast adjusted EPS of $10.72, an 8.8% increase from $9.85 in fiscal 2025. Quest Diagnostics shares have risen 18.2% over the past 52 weeks, outperforming the State Street Health Care Select Sector SPDR ETF's 16.3% gain but lagging the S&P 500 Index's 20.7% return.

Quest Diagnostics received New York State approval for its Haystack MRD liquid biopsy test, enabling nationwide use for detecting residual or recurrent cancer. The approval follows published research indicating the test's high sensitivity for minimal residual disease monitoring. Quest Diagnostics also entered a national partnership with Attunio Health to support an AI-powered precision psychiatry platform, providing scalable laboratory infrastructure for mental health diagnostics across the United States. The Haystack MRD test now has regulatory clearance across all 50 states and clinical backing from major centers such as Memorial Sloan Kettering and City of Hope, positioning Quest to compete more directly with other cancer monitoring players like Guardant Health and Exact Sciences. On the mental health side, serving as the lab backbone for an AI-powered precision psychiatry platform gives Quest a role in turning biological markers into routine psychiatric decision support, an area where competitors such as Labcorp and Mayo Clinic Laboratories are also active.

Attunio Health has expanded its clinical infrastructure by selecting Quest Diagnostics as its national laboratory backbone and integrating Getlabs for at-home blood collection, just days after publicly launching its AI-powered precision psychiatry platform. The partnership enables scalable access to advanced diagnostic testing across the United States, helping clinicians identify biological contributors to mental health conditions such as metabolic dysfunction, inflammation, hormonal imbalances, and genetic factors. Getlabs will allow certified mobile phlebotomists to collect blood and genetic samples directly from patients' homes or workplaces, reducing friction in diagnostic testing. The company says this infrastructure supports its Closed-Loop Precision Psychiatry model, where treatment is continuously informed by biological and behavioral data from wearables, blood biomarkers, and AI analysis.

Quest Diagnostics' Haystack MRD test received approval from the New York State Department of Health's Clinical Laboratory Evaluation Program, authorizing its use for identifying residual or recurring disease in patients with solid tumor cancers. The approval means the test is now available for patient testing in all 50 states, as New York was the final state requiring separate authorization. Following the news, DGX shares rose 3% to close at $203.11. The company continues to expand its oncology portfolio, with recent research presented at the ASCO Gastrointestinal Cancers Symposium highlighting the test's clinical value in monitoring colorectal cancer. Quest Diagnostics has a market capitalization of $22.48 billion, and the Zacks Consensus Estimate projects 2026 earnings growth of 8.8% and revenue growth of 7.2%.

Quest Diagnostics is positioned for growth driven by advanced diagnostics and operational improvements, though debt and macroeconomic pressures remain concerns. The company saw high single-digit growth in physician channel revenues in the first quarter of 2026, supported by strong demand for innovative testing and expanded health plan access. Its AD-Detect blood test for Alzheimer's disease continued double-digit revenue growth, and the company is scaling its Co-Lab Solutions across all 21 hospitals of Corewell Health. However, long-term debt stood at $5.16 billion against a cash balance of only $393 million, with a debt-to-capital ratio of 42.5%. The Zacks Consensus Estimate for 2026 earnings per share is $10.72 on revenues of $11.83 billion, implying 7.2% growth.

Quest Diagnostics shares have underperformed the S&P 500 over the past year, rising 8.5% compared to the index's 25.4% return, even after the company reported strong first-quarter 2026 results. The stock gained 4.5% on April 21 following revenue of $2.9 billion, a 9.2% year-over-year increase, and adjusted diluted earnings per share of $2.50, up 13.1%. Management raised its full-year 2026 outlook to adjusted diluted EPS of $10.63 to $10.83. Analysts maintain a consensus Moderate Buy rating with a mean price target of $223, a 14.4% premium to current levels.