SECAUCUS, N.J. - Quest Diagnostics (NYSE: NYSE:DGX), a leading provider of diagnostic information services, has been awarded contracts by the U.S. Centers for Disease Control and Prevention (CDC) to enhance preparedness for avian influenza and Oropouche viruses. These contracts aim to ensure that Quest can supplement public health laboratories quickly if an outbreak of these infectious diseases occurs among the population.
The company will introduce a molecular laboratory test designed to detect the avian influenza A H5 virus in people suspected of infection or meeting CDC criteria for testing. This test will be available by prescription for clinical purposes by the end of October. It was developed at Quest's advanced laboratory in San Juan Capistrano, California, and will be performed there.
Quest's new test targets the influenza A H5 virus, including A(H5N1), and is distinct from tests for seasonal influenza A subtypes, influenza B, and other respiratory viruses. It is intended for respiratory or conjunctiva specimens from individuals suspected of having avian influenza A H5 virus. Quest's patient service centers, however, will not provide specimen collection for this test.
Currently, avian influenza A(H5N1) is widespread in wild birds globally and has led to outbreaks in U.S. poultry and dairy cows, with sporadic human cases mostly among farm workers. While the public health risk remains low, the CDC is closely monitoring the situation. The introduction of Quest's test will allow physicians to order avian influenza testing from a national commercial laboratory, potentially increasing access and testing capacity.
In addition to avian influenza testing, Quest has also received a CDC contract to develop diagnostics for the Oropouche virus, an emerging virus in the Americas transmitted to humans by infected biting midges and some mosquito species.
Dr. Yuri Fesko, Senior Vice President and Chief Medical Officer at Quest Diagnostics, acknowledged the importance of collaboration between commercial laboratories and federal and state agencies in responding to emerging diseases. Elizabeth Marlowe, PhD, Executive Scientific Director at Quest Diagnostics, commended the CDC's proactive measures to prepare commercial laboratories for potential health threats.
This announcement is based on a press release statement from Quest Diagnostics.
In other recent news, Quest Diagnostics has seen a series of promising developments. The company reported a strong third quarter with total revenues reaching $2.49 billion, marking an 8.5% increase year-over-year, driven by both organic expansion and strategic acquisitions, including the purchase of LifeLabs. Despite weather disruptions and operational challenges, Quest Diagnostics provided an upbeat full-year 2024 guidance with projected revenues between $9.8 billion and $9.85 billion and adjusted earnings per share (EPS) of $8.85 to $8.95.
In analyst updates, Baird, a financial services firm, upgraded Quest Diagnostics stock from Neutral to Outperform, citing a positive outlook on the healthcare sector's momentum and several favorable trends. Similarly, Leerink Partners adjusted their outlook on Quest Diagnostics, increasing the price target to $165 from $160, reflecting a valuation of approximately 17 times the firm's calendar year 2025 earnings per share estimate.
In terms of other company news, Quest Diagnostics has been making strides in its market presence, notably through the acquisition of LifeLabs which expanded the company's footprint in the Canadian market. Management's preliminary commentary for fiscal year 2025 sets a solid baseline against multi-year targets, with the company's pace of deal-making and high single-digit EPS growth seen as reasonable expectations for the future. These are the recent developments surrounding Quest Diagnostics.
InvestingPro Insights
Quest Diagnostics' recent contract awards from the CDC align well with its position as a prominent player in the Healthcare Providers & Services industry, as highlighted by InvestingPro Tips. The company's ability to secure these contracts for avian influenza and Oropouche virus testing demonstrates its continued relevance and adaptability in the face of emerging health threats.
Financial data from InvestingPro shows that Quest Diagnostics has a market capitalization of $17.64 billion, reflecting its significant presence in the diagnostic services market. The company's revenue for the last twelve months stands at $9.54 billion, with a modest growth of 2.6% over the same period. This growth, coupled with the new CDC contracts, suggests that Quest is actively expanding its service offerings and market reach.
InvestingPro Tips also reveal that Quest Diagnostics has raised its dividend for 13 consecutive years and has maintained dividend payments for 21 consecutive years. This track record of consistent dividend growth could be appealing to investors looking for stable income in the healthcare sector. The current dividend yield is 1.91%, which may be attractive in the current market environment.
It's worth noting that Quest's stock is trading near its 52-week high, with a price-to-earnings ratio of 19.82. This valuation suggests that investors are optimistic about the company's future prospects, possibly influenced by developments such as the CDC contracts.
For investors interested in a deeper analysis, InvestingPro offers additional tips and insights. Currently, there are 10 more InvestingPro Tips available for Quest Diagnostics, which could provide further context for the company's financial health and market position.
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