DGX
Quest Diagnostics Incorporated
$207.44
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 22.0% above fair value
You pay
$207.44
Bear
$135.98
Fair
$169.98
Bull
$203.98
Bear
$135.98
-34.4%
$9.89 × 12x P/E
Fair
$169.98
-18.1%
$9.89 × 15x P/E
Bull
$203.98
-1.7%
$9.89 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
21.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $220.57 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $169.98 per share.
Warnings
Wall Street's average price target is $220.57 (from 34 analysts). Our estimate is 33% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples