Incannex Healthcare stock tumbles after filing $100M offering
On Wednesday, Redburn-Atlantic initiated coverage on Quest Diagnostics (NYSE: NYSE:DGX), issuing a Buy rating with a price target of $195.00. Currently trading at $169.28, the stock shows strong momentum with a 30.7% return over the past year. The firm’s analysis suggests that Quest Diagnostics shares potential for steady growth, noting parallels with its industry peer Labcorp. According to InvestingPro analysis, the company’s current valuation appears to be on the higher side compared to its Fair Value.
The research firm projects a revenue compound annual growth rate (CAGR) for Quest Diagnostics of 3-4% from 2025 to 2028. This forecast builds on the company’s existing 5-year revenue CAGR of 5% and comes as Quest maintains a GOOD overall financial health score. This forecast is based on the assumption that the company will mirror Labcorp’s performance due to the minimal structural differences between the two diagnostic service providers. For deeper insights into Quest’s growth metrics and peer comparison, InvestingPro subscribers can access the comprehensive Pro Research Report.
Redburn-Atlantic also expects Quest Diagnostics to allocate approximately $450 million annually to acquisitions starting in 2026, contributing an additional 1-1.5% to its yearly revenue growth. These acquisitions are seen as a strategic move to bolster the company’s market position and enhance its service offerings.
The firm anticipates that the diagnostics company will increase its dividend by mid-single digits each year, building on its impressive track record of 13 consecutive years of dividend increases and a current yield of 1.89%. Moreover, Quest Diagnostics is projected to repurchase $500-600 million in shares annually, which is expected to support a 9% earnings per share (EPS) CAGR from 2025 to 2028, or 7% excluding the impact of the buybacks.
The analyst’s commentary underscores confidence in Quest Diagnostics’ financial strategy and its ability to deliver value to shareholders through consistent dividend growth and share repurchases. The $195.00 price target reflects this positive outlook for the company’s financial performance over the coming years.
In other recent news, Quest Diagnostics has reaffirmed its full-year 2025 guidance, projecting net revenues between $10.70 billion and $10.85 billion, with adjusted diluted earnings per share (EPS) ranging from $9.55 to $9.80. However, the company anticipates a first-quarter revenue headwind of approximately $25 million and an EPS headwind of about $0.10 due to adverse weather conditions. Additionally, Citi has downgraded Quest Diagnostics’ stock from Buy to Neutral, adjusting the price target to $185, citing concerns over margin pressures and earnings growth prospects. Meanwhile, Truist Securities has maintained a Hold rating with a price target of $182, emphasizing the company’s strategic investments in artificial intelligence and technology.
Quest Diagnostics has also announced a partnership with Google (NASDAQ:GOOGL) Cloud, aiming to enhance its data management and provide personalized experiences through advanced AI technologies. This collaboration is expected to improve the company’s data analytics and operational efficiency while ensuring data privacy and security. Despite the mixed reactions from analysts, including a neutral stance from Citi and an outperform rating from Baird, Quest Diagnostics continues to focus on its strategic initiatives, such as automation and robotics, to drive sustainable growth. The company remains committed to expanding its market presence and enhancing shareholder value through strategic partnerships and technological advancements.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.