Quest Diagnostics (DGX) PT Raised to $181 at Citi

Citi analyst Ralph Giacobbe raised the price target on Quest Diagnostics (NYSE: DGX) to $181.00 (from $158.00) while maintaining a Buy rating.

The analyst commented, "DGX updated guidance to reflect the surge in Delta variant, which is not overly surprising considering the revenue and margin pull-thru on incremental COVID-19 testing, and commentary around core business hanging in despite the surge was encouraging. That said, even the updated guidance appears conservative considering that DGX has been running at an average of ~80K molecular tests per day QTD as of the end of Aug vs updated low end of guidance suggesting 40K a day for 2H. Nonetheless, we acknowledge there are a number of variables to determine EPS impact, and a still fluid testing backdrop given the COVID-19 Delta variant likely driving some conservatism. We update our model, raising our 2021 and 2022 estimates to reflect incremental COVID testing above our prior assumptions. With our higher estimates we raise our TP to $181 (from $158); maintain Buy Rating."

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