Deutsche Bank Reiterates Buy Rating on Medco Health Solutions (MHS)

Deutsche Bank is out with an analyst note this morning, where they reiterate their Buy rating on shares of Medco Health Solutions

; they have a $78.00 price target on the stock. DB analysts said, “Medco Health and Celesio AG announced the formation of a 50:50 pan-European joint venture, Medco Celesio B.V, which will be focused on improving clinical outcomes for patients while also lowering healthcare costs. The initial focus of the JV from a pharmacy service stand point will be on complex diseases, such as diabetes, asthma, high-cholesterol and heart disease, with a clear intent of improving adherence and thus safety and efficiency.” “Furthermore, the joint venture will be launched initially in Germany in 2010, including the collaboration of the parent companies' respective mail order pharmacies, DocMorris and Europa Apotheek Venlo. It will then extend rapidly in phases to the major European markets, including the U.K., France, Spain and Italy. Over time, it is planned to expand its geographic footprint into as many as 27 EU member states plus Switzerland and Norway.” They also noted, “We view today's announcement of a joint venture across Europe with Celesio as another positive strategic step by MHS management in improving the LT growth profile of the business post the generic wave. This builds off of MHS's nascent effort in the region, which included the acquisition of a small mail pharmacy, Europa Apotheek, and strategic relationships with United Drug and Apoteket. Furthermore, the initial service focus on complex diseases dovetails perfectly with MHS's TRC strategy in the US and allows for increased export of their expertise globally.” “In conclusion, we view this as another example of a low cost of capital venture with meaningful long term growth potential and value creation capability.”