UBS on Healthcare Distribution - PBMs: Implications from SXCI/CHSI Deal
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Up: 8 | Down: 5 | New: 26
Rating Summary:
34 Buy, 5 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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UBS on Healthcare Distribution - PBMs: Implications from SXCI/CHSI Deal
Analyst, Steven Valiquette, said, "The timing of the newly proposed PBM merger between SXCI and CHSI has occurred a bit earlier than most investors were expecting, and thus raised some questions as to whether the deal is offensive or defensive in nature."
"While the combined SXCI/CHSI entity will obviously have greater scale than either company on a standalone basis, we do not see the combined company with only 5.8% market share suddenly being large enough to be a material threat to the growth trajectory of either ESRX/MHS or CVS. Thus, we make no changes to our ESRX and CVS estimates in light of this transaction. We also believe that this transaction has no bearing on whether WAG/ESRX will settle their payor dispute."
UBS maintains a 'Buy' on CVS (NYSE: CVS) and Express Scripts (Nasdaq: ESRX). Maintains a 'Neutral' on SXC Health Solutions (Nasdaq: SXCI), but raises price target from $64 to $90. Other stocks of note: Catalyst Health Solutions (Nasdaq: CHSI) and Medco (NYSE: MHS).
Analyst, Steven Valiquette, said, "The timing of the newly proposed PBM merger between SXCI and CHSI has occurred a bit earlier than most investors were expecting, and thus raised some questions as to whether the deal is offensive or defensive in nature."
"While the combined SXCI/CHSI entity will obviously have greater scale than either company on a standalone basis, we do not see the combined company with only 5.8% market share suddenly being large enough to be a material threat to the growth trajectory of either ESRX/MHS or CVS. Thus, we make no changes to our ESRX and CVS estimates in light of this transaction. We also believe that this transaction has no bearing on whether WAG/ESRX will settle their payor dispute."
UBS maintains a 'Buy' on CVS (NYSE: CVS) and Express Scripts (Nasdaq: ESRX). Maintains a 'Neutral' on SXC Health Solutions (Nasdaq: SXCI), but raises price target from $64 to $90. Other stocks of note: Catalyst Health Solutions (Nasdaq: CHSI) and Medco (NYSE: MHS).
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