UPDATE: Goldman Sachs Upgrades Quest Diagnostics to Neutral on Defensiveness, New CEO
Goldman Sachs raises its rating on Quest Diagnostics (NYSE: DGX) from Sell to Neutral and increases its price target from $55 to $59.
Goldman Sachs notes, "We upgrade shares of DGX to Neutral from Sell as we now have a greater appreciation for upside to earnings through cost rationalization and additional share repurchase. The company's domestic defensive sales mix (stable volumes, no EU exposure) is attractive relative to our coverage universe's limited visibility and mounting headwinds (China, EU, NIH) as we head into 2H12, in our view. We continue to see a muted top line given the stable but tepid volume environment. However, we now believe that there is greater potential for cost cutting with a new CEO, and await further details on his plans for improving margins and capital allocation."
DGX closed at $59.90 on Friday.
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