FBR Capital Maintains an 'Outperform/Top Pick' on Medco Health (MHS); Starts the Year Off Right, but FEP and United Overhangs Still Remain
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Price: $70.30 --0%
Rating Summary:
5 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 8 | New: 10
Rating Summary:
5 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 8 | New: 10
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FBR Capital maintains an 'Outperform/Top Pick' on Medco Health Solutions (NYSE: MHS), PT $75.
FBR analyst says, "While 2011 is a year that lacks gross margin expansion and has a sizeable increase in SG&A expense, our expectation is that earnings can continue to grow considerably. As we look to 2012 and beyond, the prospects for continued growth from generic drug availability and specialty pharmacy is considerable. We have factored in a sizeable $3 billion of share repurchase over the next 12–15 months, and our 2011 estimate is slightly above the top end of the company’s guided range for non-GAAP EPS. The prospects remain promising for Medco as the United Biosource transaction has begun to contribute to results, and the company is demonstrating the ability to drive more of its customers towards generics despite no new generic launches."
"1Q11 posted a $0.03 beat of our EPS estimate, but we are trimming our 2Q11 and 3Q11 EPS estimates by one cent each ($0.95 and $1.07, respectively). The net effect is a penny increase in our 2011 EPS estimate to $4.13, which is slightly above the high end of management’s guidance. Our 2012 EPS estimate of $5.05 remains the same."
For more ratings news on Medco Health Solutions click here and for the rating history of Medco Health Solutions click here.
Shares of Medco Health Solutions closed at $58.94 yesterday.
FBR analyst says, "While 2011 is a year that lacks gross margin expansion and has a sizeable increase in SG&A expense, our expectation is that earnings can continue to grow considerably. As we look to 2012 and beyond, the prospects for continued growth from generic drug availability and specialty pharmacy is considerable. We have factored in a sizeable $3 billion of share repurchase over the next 12–15 months, and our 2011 estimate is slightly above the top end of the company’s guided range for non-GAAP EPS. The prospects remain promising for Medco as the United Biosource transaction has begun to contribute to results, and the company is demonstrating the ability to drive more of its customers towards generics despite no new generic launches."
"1Q11 posted a $0.03 beat of our EPS estimate, but we are trimming our 2Q11 and 3Q11 EPS estimates by one cent each ($0.95 and $1.07, respectively). The net effect is a penny increase in our 2011 EPS estimate to $4.13, which is slightly above the high end of management’s guidance. Our 2012 EPS estimate of $5.05 remains the same."
For more ratings news on Medco Health Solutions click here and for the rating history of Medco Health Solutions click here.
Shares of Medco Health Solutions closed at $58.94 yesterday.
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