Piper Jaffray Lowers Price Target On Quest Diagnostics Due To Lower Projected Earnings

Quest Diagnostics (DGX), the leading provider of clinical lab services in the U.S., recently came out with its 4Q10 results. In the 4Q10 Quest Diagnostics beat Piper Jaffrey and Wall Street analyst expectations with EPS of $.97 compared to the analysts estimates of $.93 and $.91 respectively. Quest Diagnostics is predicting revenue growth of 1% for F2011 and EPS of $4.10-4.30, which falls below the analysts consensus estimate. While projecting marginal revenue growth, the company is optimistic due to the improving economy and the impact of Health Care Reform, which is why Piper Jaffray's analysts feel that the company's revenue and EPS projections for F2011 may be conservative. Some risks the company faces going forward are potential changes in government and commercial reimbursement. Piper Jaffray maintains a neutral rating on Quest Diagnostics and lowered its price target from $57 to $56. At the time of Piper Jaffray's report Quest Diagnostics was trading at $54.17.