Episode
Quest Diagnostics Stock (DGX): It Beat, RAISED Guidance, and Broke Out — Why We Say BUY
- Published
- Jul 24, 2026
- Duration seconds
- 882
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Summary
Quest Diagnostics (DGX) Q2 2026 — Quest Diagnostics (DGX), one of the two national giants of U.S. lab testing, reported a strong Q2 2026: adjusted EPS of $3.12 beat the ~$2.82 estimate (+19.1% YoY) on revenue of $3.04B (+10.2%), with 10.0% ORGANIC growth; reported GAAP EPS was $2.84 (+15%). The engine was pure volume — requisitions rose 13.1% (organic +13.0%) — while revenue per requisition fell 2.8%, so adjusted operating margin slipped to 16.5% (from 16.9%). Management RAISED full-year 2026 guidance again — adjusted EPS to $11.05–$11.25, revenue to $11.95–$12.05B, and operating cash flow to ~$1.80B. The stock jumped ~8.6% on the print to a fresh 52-week high (~$238 intraday), closing near $228, up from a $166 low. At ~20x forward EPS, our owner-earnings DCF lands fair value near $250 — above the price and above the Street's ~$232 Hold target. Our call: BUY, 4/5. Quest Diagnostics is the boring, defensive backbone of American lab testing — a ~$25B company that runs the blood, urine, and molecular tests your doctor orders, serving half of U.S. physicians and hospitals and one in three adults a year, led by CEO Jim Davis. For years the market has treated it as a slow, low-growth compounder that buys its growth by acquiring smaller labs. Q2 2026 quietly challenged that: adjusted EPS of $3.12 beat the ~$2.82 estimate (+19.1% YoY), revenue rose 10.2% to $3.04B — and critically, 10.0% of that was ORGANIC, from the existing business, not deals. Test volume (requisitions) jumped 13.1% (organic +13.0%) across physician, hospital, and consumer channels, with double-digit gains in high-value Advanced Diagnostics (Alzheimer's AD-Detect blood tests, Haystack MRD molecular cancer testing, cardiometabolic panels). Management RAISED full-year guidance again — adj EPS to $11.05–$11.25…