Quest Diagnostics shares downgraded to Hold at Deutsche Bank, after concerns of overvaluation

Deutsche Bank issued a report on Quest Diagnostics Inc.

downgrading the health care company from Buy to Hold. Deutsche Bank however did raise Quest Diagnostics's price target from $77 to $80. Darren Lehrich, Dana Nentin, and Joshua Kalenderian, analysts at Deutsche Bank wrote, "We remain encouraged by DGX's ability to return to consistently more positive operating earnings growth in 2015-16 due to improving underlying volume, less onerous pricing headwinds and good expense management...With improving operating leverage, we believe DGX should be able to grow operating income mid/upper single digits in 2015-2016, and with share repurchase, we believe DGX should be able to grow EPS by 10 percent per year." The analysts highlighted a few key upside catalysts for the company: 1. better volume growth 2. accretive M&A 3. improved environment for outsourcing of hospital labs to large independent players 4. favorable rule-making outcome with the Medicare lab fee schedule refinement. Quest Diagnostics Inc. closed Tuesday at $77.23.