Morgan Stanley analyst Ricky Goldwasser downgraded Express Scripts Holding Company ESRX from Equal-weight to Underweight on Monday. Despite the downgrade to the equivalent of a sell rating, the analyst boosted his price target on the stock from $67 to $70.
Goldwasser is concerned with the possibility Express Scripts is at a long-term disadvantage given its lack of an integrated offering. "[W]e are concerned with LT negative impact to earnings by looming loss (or reprice) of Anthem Inc ANTM and PBM market dynamics," the analyst said.
While Goldwasser noted the discovery scheduled related to the Anthem suit clarified a near-term issue with Express Scripts earnings power, he pointed to competitive pressure which is "rising and Express’ standalone model appears increasingly disadvantaged."
Investors in Express Scripts have seemingly shrugged at the Morgan Stanley downgrade Monday; the stock last traded at $74.51, down just 0.09 percent from Friday's closing price.
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