UPDATE: Monness Crespi Hardt Initiates Express Scripts with Buy on Cash EPS Growth

In a report published Monday, Monness Crespi Hardt analyst Jim Chartier initiated coverage on Express Scripts Holding Company ESRX with a Buy rating and $78.00 price target. In the report, Monness Crespi Hardt noted, “We are initiating coverage of ESRX shares with a Buy rating as we see low-teens cash EPS growth in '14 on higher than consensus estimates with upside potential from Affordable Care Act (ACA) related expansion. While the generic conversion wave peaked in '12, continued improvement in generic dispensing and mail order penetration rates do not drive the same level of margin improvement as they once did. Therefore, the improvement in these metrics will continue to be additive to margins. In addition, we believe better than $1 billion in net synergies from the Medco acquisition, growth in higher margin narrower pharmacy network products, and ACA-related inertia over the next two years for large employers, will keep pricing competition and thus margins should improve in '14.” Express Scripts Holding Company closed on Friday at $61.74.