DGX: Future Lab Partnerships And Testing Pipeline Will Support Balanced Outlook

Analysts have nudged their price targets on Quest Diagnostics higher by between $5 and $25 per share, citing solid Q3 outperformance, raised guidance, and confidence in organic growth and future testing catalysts.

Analyst Commentary

Street research following the Q3 print highlights a generally constructive stance on Quest Diagnostics, with most price target increases framed around stronger than expected fundamentals and improving visibility into growth drivers over the next two years.

Bullish Takeaways

• Bullish analysts point to Q3 sales and EPS beats and raised full year guidance as evidence that execution is tracking ahead of prior expectations, supporting higher valuation multiples.
• Several notes emphasize accelerating organic volume and revenue trends, which are viewed as sustainable and a key underpinning for upwardly revised price targets into the $200 to $215 range.
• Future testing catalysts, including the Haystack MRD test ramp expected in 2026, are seen as incremental growth drivers that could extend the earnings growth runway and justify premium pricing vs. more mature lab peers.
• The broader lab environment is described as nearing a Goldilocks backdrop, with stable demand and manageable cost trends, which supports confidence in steady margin performance.

Bearish Takeaways

• Bearish analysts, while lifting targets, largely maintain neutral stances, reflecting caution that much of the near term strength may already be reflected in the current share price.
• Post earnings share pressure is attributed in part to investor rotation toward higher growth tools names, highlighting the risk that Quest trades more as a defensive lab asset and may lag in risk on markets.
• Some commentary flags that sector sentiment, though improved from prior lows, remains fragile, which could limit multiple expansion even if operational execution remains solid.
• Healthcare utilization and admissions trends are described as decelerating or normalizing, suggesting a more balanced backdrop where upside to estimates could become harder to achieve from here.

What's in the News

• Hims & Hers Health selected Quest Diagnostics as its lab partner for a new testing offering that the company believes can scale to a $1 billion business. The agreement will integrate Quest collection and results into the Hims platform for personalized treatment plans (Wall Street Journal).
• Quest and Octave Bioscience entered a strategic collaboration for the Octave Multiple Sclerosis Disease Activity Test. The arrangement gives Octave access to Quest's 7,000 patient service centers and grants Quest first rights to support specimen collection for future MS and Parkinson's assays.
• A new Neurology Clinical Practice study found that two Quest developed blood tests, including the AD Detect Aβ 42/40 and p tau217 evaluation panel, achieved 91% sensitivity and 91% specificity for confirming Alzheimer's pathology. One panel has already launched and another is planned for 2026.
• Quest and Guardant Health announced a multi year collaboration to offer the FDA approved Shield blood test for colorectal cancer screening through Quest's national network, with commercial rollout expected in early 2026.
• Quest formed a first of its kind collaboration with Epic to power Projectova, a multi year initiative to consolidate lab IT systems and streamline ordering, reporting, scheduling and billing across Quest's nationwide operations using Epic's Diagnostic Enterprise platform.

Valuation Changes

• Fair Value: Unchanged at approximately $197.31 per share, indicating no revision to intrinsic value estimates following the latest update.
• Discount Rate: Edged down slightly from 6.956 percent to 6.956 percent, reflecting a negligible improvement in perceived risk or cost of capital.
• Revenue Growth: Essentially flat, ticking down marginally from 3.8793 percent to 3.8793 percent, implying a stable long term growth outlook.
• Net Profit Margin: Stable at roughly 11.08 percent, with only an immaterial rounding change in the model assumptions.
• Future P/E: Maintained at about 20.06 times forward earnings, signaling no meaningful change in valuation multiple expectations.