Quest Diagnostics stock remains a "safe haven" in a "choppy macro environment," an analyst said Tuesday after the blood testing behemoth topped Wall Street's first-quarter expectations.
The New Jersey-based lab-testing chain earned an adjusted $2.21 per share on $2.65 billion in sales, rising a respective 8.3% and 12.1% year over year. Both metrics easily beat expectations for earnings of $2.15 a share and $2.63 billion in sales, according to FactSet.
Analysts credited a strong 12.4% growth in requisition volume — the number of orders — for the first-quarter outperformance. The company also reaffirmed its outlook for $9.55 to $9.80 earnings per share and $10.7 billion to $10.85 billion in sales.
"Overall, we see today's print as solid and delivering in a choppy macro environment, which should help the stock to maintain its safe haven status," Evercore ISI analyst Elizabeth Anderson said in a report to clients.
Quest Diagnostics stock jumped 6.8%, closing at 172.82. Shares are forming a flat base with a buy point at 178.87, and bounded off their 50-day moving average, according to MarketSurge. But, it's important to note, Investor's Business Daily recommends a 0% to 20% exposure to the market in this risky environment.
Quest Diagnostics: Business Is Solid
William Blair analyst Andrew Brackmann characterized Quest Diagnostics' report as "consistent and with little drama."
"The business appears to be remaining on solid footing, with demand rebounding in March following a slower start to the quarter and margins also moving higher year-over-year and exceeding estimates," he said in a client note.
Brackmann kept his outperform rating on Quest Diagnostics stock. He expects the company to be insulated from economic noise with the majority of its revenue coming from the U.S. and, therefore, not subject to tariffs. That will likely offset a very minimal impact from tariffs, he said.
Quest stock is trading at a slight premium, "but we see this as warranted given the defensive nature of the company and its consistent execution," he said.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
