Diplomat Pharmacy (DPLO) PT Cut To $8 At Credit Suisse

Credit Suisse analyst, Erin Wright, reiterated her Neutral rating on shares of Diplomat Pharmacy (NYSE: DPLO) and cut her price target to $8.00 (from $10.00) after hosting investor meetings with CEO, Brian Griffin. Specialty represents 87% of revenue and management reiterated that it is seeing recent incremental headwinds since early January. The analyst believes this points to unfavorable reimbursement, narrower networks, and more aggressive patient channel management tactics from captive competitors.

The analyst stated "2019 will be a rebuilding year for the PBM, following recent losses, and DPLO views its more flexible plan designs will be an advantage in the middle market, where it is uniquely positioned as an unencumbered entity with also reinvigorated sales and account management teams. In 2019, rebate retention (as a % of PBM gross profit) will be similar to 2018 experience (69%), and while it is preparing for an era with less reliance on rebates and has opened to more flexible models, it noted little demand for new point-of-sale rebate concepts to date, despite more aggressive offerings from competitors".

For an analyst ratings summary and ratings history on Diplomat Pharmacy click here. For more ratings news on Diplomat Pharmacy click here.

Shares of Diplomat Pharmacy closed at $5.70 yesterday.

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