Market Overview

Baird Downgrades Express Scripts On Industry Instability

Share:
Baird Downgrades Express Scripts On Industry Instability

Regulatory uncertainty is rising too high for Baird Equity Research to remain bullish on Express Scripts Holding Co (NASDAQ: ESRX).

The Rating

Analyst Eric Coldwell downgraded Express Scripts to Neutral with an $81 price target.

The Thesis

Previously, Express Scripts’ improving new business trends, its consistency in core profit and loss statements and a better sentiment for pharmacy benefits managers (PBMs) made for an attractive near-term risk-reward profile.

Now, however, Coldwell considers upside dependent on a successful sale to CIGNA Corporation (NYSE: CI). The deal is seen to have favorable odds, but the risk of downside has “significantly increased.”

“PBMs have been under heavy political attack in recent weeks and the stand-alone trajectory is almost impossible to model right now,” Coldwell wrote in a note.

The risk is primarily in recent advancement of plans for rebate-model reform.

“[It] could be material to ESRX profit model and makes long-term stand-alone modeling almost impossible right now,” Coldwell wrote.

Price Action

At time of publication, shares were trading up marginally around $77.

Related Links:

CVS: An Interesting Trade On The Cigna-Express Scripts Deal

Predicted Gross Margin Pressure, EPS Erosion Turn Bernstein Bearish On Express Scripts

Latest Ratings for ESRX

DateFirmActionFromTo
Nov 2018Leerink SwannMaintainsMarket PerformMarket Perform
Nov 2018BarclaysMaintainsEqual-WeightEqual-Weight
Sep 2018Credit SuisseDowngradesOutperformNeutral

View More Analyst Ratings for ESRX
View the Latest Analyst Ratings

Posted-In: Baird Equity Research Eric ColdwellAnalyst Color Downgrades Analyst Ratings Best of Benzinga

 

Related Articles (ESRX + CI)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
VREXNorthland SecuritiesInitiates Coverage On42.0
PFSWCraig-HallumDowngrades0.0
EAMorgan StanleyMaintains88.0
ELMorgan StanleyMaintains178.0
SPLKMorgan StanleyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Trader Essentials
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
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Philip Morris' Weakness In Japan, South Korea Sparks Cowen Downgrade

Analyst: Negative Press, Privacy Scandal Won't Keep Facebook From Having A Solid Quarter