UPDATE: Credit Suisse Assumes Coverage on Quest Diagnostics with Neutral Rating, $67 PT
In a report published Friday, Credit Suisse assumed coverage on Quest Diagnostics (NYSE: DGX) with a Neutral rating and $67.00 price target.
Credit Suisse noted, “We are assuming coverage of DGX with a Neutral rating (previously Outperform). Recall DGX is the largest independent clinical laboratory in the U.S. We acknowledge the company & new management have an opportunity to offset some of the anemic top-line trends and close the margin gap relative to LH which could aid the earnings growth profile. Moreover strong cash flows & greater clarity this fall on plans to return value to shareholders should support valuation. However, trading at 12.4x our new F13 estimates on a P/E basis and 7.8x on an EV/EBITDA basis, and having outperformed industry & healthcare services peers YTD, we believe the current risk/reward profile is more balanced. We are increasing our estimates and maintaining our TP of $67.”
Quest Diagnostics closed on Thursday at $62.19.
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