DGX: Future Revenue Expansion And Partnerships Will Balance Near-Term Risks

Quest Diagnostics saw its analyst price target increase, with several firms now projecting new targets between $195 and $215 per share. Analysts cite strong quarterly results and ongoing positive momentum in core business trends.

Analyst Commentary

Recent Street research has highlighted both optimism and caution regarding Quest Diagnostics' future performance. Analysts have raised price targets following impressive quarterly results and upgraded guidance, but are also weighing valuation concerns after the stock's recent rally.

• Bullish analysts raised price targets in response to strong sales and earnings that exceeded consensus, signaling confidence in the company's execution and organic growth momentum.
• Upward revisions to full-year guidance reflect a positive outlook for continued revenue and volume expansion. There is particular encouragement around accelerating core business trends.
• Expectations for product innovation, such as the Haystack MRD test ramping up in 2026, contribute to optimism about future growth opportunities.
• Stable end markets and signs of improving sentiment in diagnostics are seen as supportive factors for valuation and long-term investment appeal.

• Bearish analysts caution that, following the recent share price rally, the risk/reward balance may be less compelling for new buyers. This suggests valuation is now less attractive.
• Some attribute the recent post-earnings share selloff to sector rotation and shifting investor preference away from defensive names such as labs, rather than company-specific issues.
• Decelerating growth in healthcare utilization and hospital admissions could present headwinds to further acceleration in revenue and profitability.
• Neutral outlooks remain among some analysts who, while positive on fundamentals, believe further upside may be limited in the near term unless new catalysts emerge.

What's in the News

• Hims & Hers Health has partnered with Quest Diagnostics to offer lab testing through its platform. The company aims to tap into a $1 billion market as customers will access testing at Quest facilities and receive personalized care plans (Wall Street Journal).
• Quest Diagnostics announced highly accurate blood tests for Alzheimer's disease pathology, with plans to launch a full panel in early 2026. A recent study showed 91% sensitivity and specificity.
• Quest finalized a major share buyback tranche and repurchased nearly 852,000 shares between July and September 2025, bringing total shares repurchased under its program to over 95 million.
• Revised financial guidance for 2025 now anticipates net revenues of $10.96 to $11.00 billion and diluted EPS of $8.58 to $8.66 for the year.
• Quest Diagnostics and Guardant Health announced a strategic collaboration to offer the Shield blood-based colorectal cancer screening test to Quest's provider network. The launch is expected in early 2026.

Valuation Changes

• Fair Value Estimate remains unchanged at $197.25 per share, indicating a stable valuation assessment.
• The discount rate has risen slightly from 6.78% to 6.96%, reflecting a minor increase in the assumed cost of capital.
• Revenue growth projections are steady, with the forecast remaining virtually flat at around 3.88% year-over-year.
• The net profit margin estimate is unchanged at approximately 11.08%, showing continued expectations for profitability.
• The future P/E ratio has increased modestly from 19.60x to 19.70x, suggesting a small upward adjustment to forward earnings valuation.