UPDATE: ISI Group Initiates Express Scripts at Market Weight, $60 PT on Upcoming PMB Selling Challenges

ISI Group initiated its coverage on Express Scripts

with a Market weight rating and a price target of $60 a share. ISI Group said, "We are initiating coverage on shares of Express Scripts with a Market Weight rating and a price target of $60.00, which on a forward basis equates to ~10x EV/EBITDA and ~14x operating EPS. Our thesis for ESRX is based on our view that while upside exists to management's $1 billion synergy bogey, the nearterm focus will be on business stabilization and retention. We also foresee a very active and potentially challenging PBM selling season for ESRX, and while the combined entities' specialty offering is highly compelling, it may be needed to offset stagnation in mail trend over the medium term." Express Scripts closed at $56.17 on Wednesday.