Quest Diagnostics downgraded on slow growth

Credit Suisse downgrades Quest rating on share price; slow testing and reimbursement growth

Associated Press

NEW YORK (AP) -- A Credit Suisse analyst lowered his company's rating on shares of Quest Diagnostics Inc. on Friday, saying the medical laboratory operator's stock is trading at a reasonable price.

THE OPINION: Analyst Glen Santangelo took over coverage of Quest shares and lowered the stock's rating to "Neutral" from "Outperform," with a price target of $67 per share.

Santangelo said the company is dealing with "anemic" growth in testing volumes and reimbursement from government programs, and he added that Quest's profit margins are weaker than those of its biggest competitor, Laboratory Corp. of America Holdings. He said the company's income growth could pick up if it successful in reducing its costs with its ongoing restructuring plan.

THE STOCK: Shares of Quest Diagnostics lost 58 cents to $61.61 in afternoon trading. The stock has ranged between $45.13 and $63.98 in the last year, reaching its peak value July 12.

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