Source: Gordon Thompson
Investment Firm Jefferies Upgrades Quest Diagnostics (DGX) Stock
In a significant move indicating bolstered trust in its financial health and growth prospects, leading investment banking firm Jefferies upgraded the stock of Quest Diagnostics (NYSE: DGX) from ‘Hold’ to ‘Buy’. This upgrade was announced on February 10, 2026, alongside an increase in the price target from $215 to $220. At the time of the announcement, the DGX stock was trading at $204.64. It’s a critical endorsement for Quest Diagnostics, a leading provider of diagnostic information services, and a sign of investor confidence in the company’s future.
Strong Demand for Diagnostic Tests Drive Profit and Revenue Projections
Quest Diagnostics has projected its 2026 profit and revenue to exceed Wall Street estimates. This optimistic forecast is driven by robust demand for diagnostic tests, a trend expected to continue into the foreseeable future. The increasing reliance on diagnostic tests to determine the presence or absence of diseases, assess patient health, and guide treatment decisions, are the key drivers of this demand.
The company’s forecast follows a successful Q4 2025, where revenues reached $2.81 billion, marking a 7.1% increase from the previous year. The diluted EPS (earnings per share) for the quarter also rose significantly by 11.8% to $2.18, with an adjusted EPS of $2.42.
Quest Diagnostics’ Robust Financial Performance in 2025
Reflecting on the full year 2025, Quest Diagnostics reported revenues of $11.04 billion, a strong 11.8% increase from 2024. The full-year diluted EPS was $8.75, up 13.8%, and the adjusted EPS was $9.85, marking a 10.3% increase. Notably, the company generated a whopping $1.89 billion in cash from operations, highlighting its robust financial position and its ability to generate healthy cash flows.
Revenue and Earnings Projections for 2026
Looking ahead, Quest Diagnostics projects 2026 revenues to be between $11.70 billion and $11.82 billion. The expected diluted EPS is estimated to range from $9.45 to $9.65, with the adjusted EPS predicted to be between $10.50 and $10.70. This optimistic outlook is underpinned by the company’s strategic focus on clinical innovations and collaborations, which are expected to drive growth in the coming years.
Demonstrating Commitment to Shareholder Value: Dividend Increase and Share Repurchase Program
In a clear demonstration of its commitment to returning value to its shareholders, Quest Diagnostics announced a 7.5% increase in its quarterly dividend. This raises it to $0.86 per share, marking the 15th consecutive year of dividend increases.
In another shareholder-friendly move, the company authorized a $1 billion increase in its share repurchase program. Share repurchase programs are often used by companies as a way to return excess cash to shareholders and indicate confidence in the company’s future profitability. The increase in the share repurchase program further demonstrates Quest Diagnostics’ robust financial health and commitment to its shareholders.
Conclusion
The recent upgrade of Quest Diagnostics’ stock by Jefferies, along with a raised price target, reflects growing confidence in the company’s financial strength and growth prospects. Coupled with promising revenue and profit projections driven by high demand for diagnostic tests, and the company’s commitment to shareholder returns, it’s clear that Quest Diagnostics is poised for a successful 2026.