UBS Starts Express Scripts (ESRX) at Neutral
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UBS initiates coverage on Express Scripts (NASDAQ: ESRX) with a Neutral rating and a price target of $76.00.
Analyst Michael Cherny commented, "We are initiating coverage of Express Scripts with a Neutral rating and a $76 price target. ESRX is the last of the major standalone PBMs, pitching its model of alignment with customers as its key selling point. The company has stemmed the tide from multiple years of meaningful share losses (post-Medco acquisition) to return retention to normalized levels. Even through the losses, ESRX remained a cash flow generating machine, and the improved retention should stabilize operating challenges. However, with limited EBIT growth opportunities (outside of significant share gains) and a looming overhang of the potential loss of the Anthem contract, we see limited upside to our fair value assumptions."
Shares of Express Scripts closed at $70.34 yesterday.
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