Quest Diagnostic Incorporated – Rare Stock with 30% Upside Oppor

18 août 2022

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Fundamental Indicators:

• Sector – Healthcare
  
• US Business Cycle Stage – late cycle, when this sector is favourable
  
• Revenue – consistently growing for the past 5 years, with 9% average annual rate
  
• Profits – explosive growth until 2021 and slight reduction in 2022 TTM
  
• Net margin – effective company with 15% margin
  
• P/E – quite low with 10.8 ratio compared to S&P500 with 21 and Healthcare sector with 23
  
• Liabilities - debt ratio is at 0.51 which is within normal limits, Net Debt/ EBITDA is at 1.28 – no problems with debt
  
• Conclusion – highly effective company with low valuation, considering that this is a defensive sector in the late business cycle, it is likely to continue growth to update historic highs
  

Technical Analysis (Elliott Waves):

• Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently at the stage of completing wave C of 3 in an Ending Diagonal pattern (see higher timeframe graph)
  
• The key elements of this scenario are Contracting Tringle of wave 4 that lasted between 2006 and 2011m which reflects accumulation phase, and the final fifth which is taking a complex shape
  
• This final fifth wave is clearly shaping up by a choppy movement which indicates formation of an Ending Diagonal (see guidelines for Ending Diagonals below)
  
• Waves A and B of the zigzag have already formed and wave C is also near completion with the fifth wave just about to start
  
• This may present a good long opportunity with a target of $174.16 – up to 30% upside
  

This is a higher timeframe to reflect the full history of Quest Diagnostic Incorporated and to provide full wave count:
https://www.tradingview.com/x/Nir9fxBb/

This is the link to the guidelines for Ending Diagonals

What do you think about Quest Diagnostic Incorporated and its short term prospects?
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