Morgan Stanley became the latest firm to raise its outlook on DGX shares
Quest Diagnostics Inc (NYSE:DGX) just received another analyst upgrade, as Wall Street continues to cheer the company's recent partnership with UnitedHealth. Just this morning, Morgan Stanley lifted its opinion on DGX stock to "overweight" from "equal weight" and boosted its price target to $120 from $103, expecting more stable pricing going forward.
This follows a similar string of price-target hikes last week, when at least three other brokerage firms hiked their targets. Barclays was the highest of that bunch, matching Morgan Stanley's $120 mark. But if Quest can gain momentum on the charts, we could see even more bull notes come through, since just five of the 15 analysts in coverage recommend buying it.
Plus, short interest has been declining in recent months, dropping 9% in the last two reporting periods. The security still has a short interest ratio of 5.5, though, meaning it'd take short sellers more than a week to cover their positions, based on average daily volumes. This elevated reading suggests there's room for the short covering trend to continue.
DGX shares are down 0.3% today at $105.50, losing some steam from last Friday's 4.9% pop. Longer term, the stock has filled its massive September bear gap, but breakout attempts so far in 2018 have been contained near the $108 level, home to the year-over-year breakeven mark. For what it's worth, the equity would need to rise 13.7% to reach the $120 level.