SECAUCUS, N.J. - Quest Diagnostics (NYSE: NYSE:DGX), a prominent provider of diagnostic information services, has announced the completion of its acquisition of select laboratory assets from OhioHealth, a recognized not-for-profit health system. This move aims to expand the availability of cost-effective and innovative laboratory services in Ohio.
The acquisition, for which the financial details remain undisclosed, is set to offer providers and patients in Ohio access to Quest's extensive test menu, network of patient service sites, and broad health plan coverage. This could also lead to lower out-of-pocket expenses for many services.
Following the acquisition, most of the outreach testing services previously conducted by OhioHealth will now be performed at Quest's full-service laboratory in Pittsburgh, Pennsylvania. OhioHealth will maintain ownership and operation of its hospital lab network, which caters to inpatient and hospital-based outpatient care, including anatomic pathology and oncology services.
Quest Diagnostics offers a full range of services designed to assist health systems and hospitals in enhancing the quality and innovation of their diagnostic laboratory services. The company's portfolio aims to improve patient experiences and reduce costs, making care more accessible and affordable.
OhioHealth, based in Columbus, Ohio, has been an established healthcare provider since 1891. The organization includes a network of 15 hospitals and over 200 ambulatory sites, serving a wide regional area.
This transaction is part of Quest Diagnostics' broader mission to provide insights that can help improve health outcomes. The company serves a significant portion of American adults and healthcare providers, leveraging one of the world's largest databases of clinical lab results to inform health decisions.
The information reported is based on a press release statement from Quest Diagnostics.
In other recent news, Quest Diagnostics has been making significant strides in the market. The company's updated revenue expectations reflect an additional $100 million, setting the new midpoint at $9.54 billion, a 3.1% year-over-year increase. This rise is primarily due to recent acquisitions, including PathAI, Allina Health, and OhioHealth. Baird has maintained a Neutral rating on Quest Diagnostics and slightly increased the price target to $155, reflecting the raised revenue guidance and acquisitions.
Evercore ISI has resumed its coverage on Quest Diagnostics, assigning an In Line rating and establishing a price target of $165. This follows the completion of Quest Diagnostics' acquisition of LifeLabs. The firm's analysis projects less than 1% revenue per requisition growth and sees modest accretion from the LifeLabs deal. Looking ahead to 2025 and beyond, Evercore ISI forecasts the base business will grow at a mid-single-digit rate.
Mizuho has maintained an Outperform rating on Quest Diagnostics while raising the price target to $160 from $155. The revision follows the company's robust second-quarter results for the year 2024. The company's performance was bolstered by stable base business trends, with increased utilization across various sectors and strong growth in both the physician and hospital markets.
Quest Diagnostics has completed its purchase of LifeLabs, a leader in the Canadian diagnostics field. The deal is valued at approximately CAN $1.35 billion (USD $1 billion). This acquisition is expected to foster growth and improve patient care, particularly for Canada's growing and aging population.
Lastly, Quest Diagnostics has entered into a definitive agreement to acquire select assets of the outreach laboratory services business from University Hospitals, a leading health system based in Ohio. This move aims to enhance access to Quest's extensive test menu and network of patient access sites across Ohio. The acquisition is anticipated to be finalized in the fourth quarter of 2024, pending customary regulatory approvals.
InvestingPro Insights
Quest Diagnostics' recent acquisition of OhioHealth's select laboratory assets aligns with the company's strong financial position and growth strategy. According to InvestingPro data, Quest Diagnostics boasts a market capitalization of $16.55 billion, reflecting its significant presence in the diagnostic services industry.
The company's financial health is further underscored by its revenue of $9.346 billion in the last twelve months as of Q2 2024, with a gross profit of $3.085 billion during the same period. This robust financial performance supports Quest's ability to pursue strategic acquisitions like the OhioHealth deal, which aims to expand its service offerings and market reach.
InvestingPro Tips highlight Quest Diagnostics' commitment to shareholder value. The company has maintained dividend payments for 21 consecutive years and has raised its dividend for 13 consecutive years. This consistent dividend policy, coupled with a current dividend yield of 2.02%, may appeal to income-focused investors.
Moreover, Quest's stock has shown strong performance, with a one-year price total return of 23.97% as of the latest data. The stock is currently trading near its 52-week high, which could indicate investor confidence in the company's growth prospects and strategic initiatives like the OhioHealth acquisition.
It's worth noting that Quest Diagnostics has 9 additional InvestingPro Tips available, offering further insights into the company's financial health and market position. These tips can provide valuable context for investors evaluating the potential impact of acquisitions like the OhioHealth deal on Quest's long-term growth strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.