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On Tuesday, JPMorgan adjusted its outlook on Quest Diagnostics (NYSE:DGX), increasing the price target from $180.00 to $190.00 while retaining a Neutral stock rating. The revision follows Quest Diagnostics’ robust performance in the first quarter and reflects a sentiment that laboratory services could serve as a relatively stable investment amidst market volatility. The stock, currently trading at $177.57, sits near its 52-week high of $179.32, with a notably low beta of 0.52 confirming its stability. According to InvestingPro data, nine analysts have recently revised their earnings estimates upward for the upcoming period.
The analysts at JPMorgan now anticipate that Quest Diagnostics will report adjusted earnings per share (EPS) of $9.70 for the fiscal year 2025, a slight increase from the previous estimate of $9.68. For the fiscal year 2026, the adjusted EPS forecast has been marginally raised to $10.53, up from $10.52. The company has demonstrated strong financial health, earning a "GOOD" overall score from InvestingPro’s comprehensive analysis framework.
The new price target is based on applying an approximately 18x target multiple to the company’s projected 2026 adjusted EPS. This calculation suggests a potential upside of about 7% from the prior target. JPMorgan’s adjustment in the target multiple is a response to Quest Diagnostics’ strong quarterly performance and the analysts’ belief in the resilience of the laboratory sector.
Quest Diagnostics has not issued any public statements in response to the revised price target at the time of this report. The company’s stock performance following the announcement will be closely watched by investors as an indicator of market response to JPMorgan’s updated valuation.
In other recent news, Quest Diagnostics reported a strong performance in its Q1 2025 earnings, surpassing market expectations with an adjusted earnings per share of $2.21, compared to the forecasted $2.16. The company achieved a revenue of $2.65 billion, slightly above the anticipated $2.64 billion, marking a 12.1% year-over-year growth. Fitch Ratings upgraded Quest Diagnostics’ Long-Term Issuer Default Rating from ’BBB’ to ’BBB+’, citing the company’s strong operational performance and stable outlook. This upgrade reflects the company’s leading market position and consistent financial policy. Additionally, Quest Diagnostics launched innovative diagnostic tests, including the AD DETECT blood test for Alzheimer’s, further expanding its advanced diagnostics portfolio. The company reaffirmed its full-year 2025 revenue guidance of $10.7 to $10.85 billion and adjusted EPS guidance of $9.55 to $9.80. Fitch anticipates Quest Diagnostics’ mergers and acquisitions activities to align with historical levels, expecting a more measured approach over the forecast period. These recent developments highlight Quest Diagnostics’ robust financial health and strategic initiatives in product innovation.
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