Zacks Investment Research downgraded shares of Quest Diagnostics Inc. (DGX) from NEUTRAL to UNDERPERFORM on February 01, 2013, with a target price of $53.00.
Quest Diagnostics reported a dismal fourth quarter 2012 with adjusted EPS of $1.01, down 15.8% year over year, missing the Zacks Consensus Estimate by $0.05. Sales declined 4% with 4.4% drop in diagnostic information services revenues. The current market environment continued to remain challenging in the form of commercial pricing pressures and Medicare cuts which may lead to a 3% reimbursement decline in 2013. We are also concerned with the overall soft industry trends leading to volume pressure. Although we hold a favorable view regarding the company's massive organizational restructuring strategy announced in October to increase operational efficiency and restore growth, the near-term visibility remains a matter of concern. Accordingly, we downgrade the stock to Underperform.
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