Core Thesis - Quest Diagnostics Incorporated (DGX) is viewed positively due to its strong market position, financial performance, and growth potential in the diagnostic health information services sector [1][6]. Financial Performance - In 2024, Quest Diagnostics generated $9.9 billion in revenue and $1.9 billion in EBITDA, with projections of $11.2 billion in revenue and $2.3 billion in EBITDA by 2026 [2]. - The company is expected to achieve $1.2 billion in free cash flow by 2026 [2]. - The current share price is $180.14, with trailing and forward P/E ratios of 21.57 and 17.06 respectively [1]. Market Position - Quest Diagnostics serves 50% of hospitals and physicians in the U.S., one-third of U.S. adults, and over 90% of insured lives, indicating a significant market presence [2]. - The clinical laboratory sector operates as a duopoly between Quest and LabCorp, providing both companies with substantial pricing power [3]. Growth Drivers - The recurring nature of diagnostic testing, supported by strong physician integration and patient loyalty, offers a durable growth runway for Quest [4]. - Increasing chronic diseases and a deteriorating health landscape in the U.S. are expected to drive demand for diagnostic services [4]. - The company is projected to have EPS of $10.50+ in 2026 and $11.50+ in 2027, suggesting a potential share price of $230 based on a 20x multiple [5]. Capital Returns - Quest Diagnostics returns capital to shareholders through a $3.20 annual dividend, yielding 1.8%, and opportunistic buybacks [3].