Kaufman Bros. Raises Price Target on Quest Diagnostics (DGX) Due to Improving Volumes
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Price: $234.40 -0.69%
Rating Summary:
15 Buy, 17 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
15 Buy, 17 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Kaufman Bros. is reiterating its Buy rating on shares of Quest Diagnostics (NYSE: DGX) and is raising its price target from $64 to $69 following its Q1 results.
The company released its Q1 results with an EPS of $1 and revenue of $1.82 billion. The firm reports that while pricing came in weaker than expected at -1.7%, volume outpaced its expectations at +2.0% to drive clinical testing revenue of 0.3%. It notes that the extra business day added 1% to its volume, but was largely offset by poor weather that decreased volume numbers by 1.4%.
The firm reports that, "volume is a leading indicator that Quest is not only retaining its current volume base, but with somewhat spotty reports on the physician office visit front, that it could also be seeing the early signs of "traction" with its specialized sales initiative that could lead to some mild market share gains. Pricing softness disappointed us. Importantly, there is "visibility" on improvement, as contract discounts are set to anniversary in 2H11."
Kaufman Bros. is lowering its FY11 EPS estimate from $4.55 to $4.37 and is reiterating its FY12 estimate of $4.95. It also raised its FY11 revenue by ~1% to $7,532.9 million.
For more ratings news on Quest Diagnostics click here and for the rating history of Quest Diagnostics click here.
Shares of Quest Diagnostics closed at $57.86 yesterday.
The company released its Q1 results with an EPS of $1 and revenue of $1.82 billion. The firm reports that while pricing came in weaker than expected at -1.7%, volume outpaced its expectations at +2.0% to drive clinical testing revenue of 0.3%. It notes that the extra business day added 1% to its volume, but was largely offset by poor weather that decreased volume numbers by 1.4%.
The firm reports that, "volume is a leading indicator that Quest is not only retaining its current volume base, but with somewhat spotty reports on the physician office visit front, that it could also be seeing the early signs of "traction" with its specialized sales initiative that could lead to some mild market share gains. Pricing softness disappointed us. Importantly, there is "visibility" on improvement, as contract discounts are set to anniversary in 2H11."
Kaufman Bros. is lowering its FY11 EPS estimate from $4.55 to $4.37 and is reiterating its FY12 estimate of $4.95. It also raised its FY11 revenue by ~1% to $7,532.9 million.
For more ratings news on Quest Diagnostics click here and for the rating history of Quest Diagnostics click here.
Shares of Quest Diagnostics closed at $57.86 yesterday.
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