UPDATE: Oppenheimer Initiates Quest Diagnostics at Underperform on Restructuring, Industry Risks

Oppenheimer initiated coverage on Quest Diagnostics DGX with an Underperform rating and a $53.00 price target. Oppenheimer noted, "While management is taking steps to streamline the company's operations, we believe the industry's headwinds will overshadow progress in the near term. Although a 4.95% reimbursement cut is on the table, if sequestration is averted, we think the industry may have to absorb an even greater pricing decline in a grand bargain scenario. We estimate that, even with the company's proposed cost reductions, reimbursement headwinds will still dominate. With volume growth trailing the industry and cost cutting a multi-year process, we believe the shares of DGX will trail its primary competitor." Quest Diagnostics closed at $57.94 on Monday.