div style=”text-align: justify;”Goldman Sachs is adding span style=”font-weight: bold;”Quest Diagnostics (NYSE:DGX)/span to Conviction Sell list while lowering their tgt to $38 from $45.br /br /span style=”font-weight: bold;”Downside to DGX on valuation, volumes and health reform/spanbr /Following relative outperformance since 4Q08, they expect Quest shares will underperform their coverage, with valuation at risk of market-relative convergence to other healthcare services names. DGX’s 10% premium to peer LH (7.1x vs 6.2x EV/EBITDA) is not justified given less balance sheet flexibility; in addition, they’ve highlighted downside risk to its outlook for 3% revenue growth this year in light of macroeconomic trends.br /br /Finally, the firm highlights potential downside to Medicare lab reimbursement as healthcare reform discussions advance (esp. given emerging pressure in the US Senate for deeper healthcare spending cuts as a partial alternative to tax increases). They see 15% potential downside to their 6 month target of $38.br /br /span style=”color: rgb(255, 0, 0);”Notablecalls: /spanThe way below market price tgt from Goldman Sachs will probably attract sellers in the stock.br //div

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