UPDATE: Morgan Stanley Downgrades Quest Diagnostics Inc. on Reimbursement Environment

In a report published on Tuesday, Morgan Stanley analyst Ricky R Goldwasser downgraded Quest Diagnostics Inc. (NYSE: DGX) to Underweight and initiated a price target of $58.00. In the report, Morgan Stanley noted, "Last night, CMS published a proposal to lower reimbursement rates for lab tests covered under the Physician Fee Schedule (PFS) by 26%. The proposed changes to reimbursement, which follows a ~35% cut in 2013, is more negative then our earlier expectations/prior model forecasts."Quest Diagnostics closed on Monday at $61.25.