Market Overview

Analyst: Amazon's Entry Into Pharmacy Is All But Certain At This Point

Share:
Analyst: Amazon's Entry Into Pharmacy Is All But Certain At This Point

Pharmacy and health care investors should brace themselves — Amazon.com, Inc (NASDAQ: AMZN) is coming. In a pair of new research notes out this week, analysts at Leerink said it’s not a matter of if Amazon will make a move into the prescription drug business, it’s a matter of when and how.

On Thursday, analyst David Larsen said he expects Amazon to officially announce its move into the pharmacy business within two years' time (see Larsen's track record here). With roughly 75 million Prime subscribers and nearly unlimited resources, Larsen said Amazon will likely make a huge impact.

“We are incrementally more cautious on the PBM and retail space given the threat of a new entrant,” Larsen wrote.

On Friday, analyst Ana Gupte said Amazon’s technology and infrastructure are also huge advantages when it comes to gaining pharmacy market share (see Gupte's track record here).

“AMZN is a meaningful competitive threat to existing players in the drug value chain with its best-in-class mail order fulfillment platform and easy-to-use one stop shopping Retail Pharmacy experience,” Gupte said.

For investors, Gupte said pharmacy retailers that are most threatened by Amazon include Walgreens Boots Alliance Inc (NASDAQ: WBA), CVS Health Corp (NYSE: CVS) and Wal-Mart Stores Inc (NYSE: WMT).

The potential impact on Express Scripts Holding Company (NASDAQ: ESRX) is much less clear. Gupte said Amazon could be a positive or a negative for Express depending on the approach it decides to take. If Amazon decides to take the Whole Foods route to enter the PBM market, Express is the most likely target for a buyout. If not, it could be the most exposed to Amazon’s self-built business.

Gupte noted that UnitedHealth Group Inc (NYSE: UNH) and Humana Inc (NYSE: HUM) are potentially insulated from Amazon.

Related Link: Drug Stores Next On The Amazon Hit List?

Latest Ratings for AMZN

DateFirmActionFromTo
Sep 2019MaintainsOverweight
Sep 2019MaintainsOutperform
Aug 2019AssumesBuy

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Ana GupteAnalyst Color Biotech Health Care Top Stories Analyst Ratings Tech General Best of Benzinga

 

Related Articles (AMZN + CVS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Netflix Makes A New All-Time High By A Wide Margin

NPD's Video Game Sales Data For September: What To Expect