What to Expect From Express Scripts Earnings

By Chris Lange Updated Jan 13, 1:08PM EST · Published Feb 16, 12:40PM EST

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What to Expect From Express Scripts Earnings — © Thinkstock

Express Scripts Holding Co. (NASDAQ: ESRX) is set to report its fourth-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $1.56 in earnings per share (EPS) on revenue of $26.58 billion. In the same period of the previous year, it posted EPS of $1.39 and $26.31 billion in revenue.

Investing in the drug business via biotechs and pharma stocks has become much more complicated. On top of political pressure over drug pricing, and companies being targeted by short sellers and anti-activists, companies that wholesale and retail drugs are occasionally putting drug companies in their bull’s-eye.

This is likely to draw more attention to the role of pharmacy benefit managers (PBMs) in drug pricing. One of the leading Democratic presidential candidates, Hillary Clinton, tweeted in late 2015 about the recent price gouging on an old drug, and that had a negative impact on the biotech stocks that we are still seeing in 2016. Many questions over the mechanism for drug pricing have yet to be answered.

However, as the discussions on the topic continue, Oppenheimer issued a report in which it noted that it believed PBMs will come into the discussion. PBMs continue to play a key role in gaining considerable pricing discounts for the patients and sponsors, and they are expected to play a significant role to counterbalance the oncoming trend of high-cost specialty prescription mix in drug spending.

Any regulatory changes to drug pricing could elevate the role of the PBM industry but at the same time could limit the impact PBM players could have on the pricing, if pricing is controlled by regulations.
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A few analysts recently weighed in on Express Scripts:

Deutsche Bank reiterated a Hold rating.
Citigroup has a Buy rating and price target of $92.
Leerink Swann reiterated a Hold rating.
Morgan Stanley has an Equal Weight rating with a $74 price target.

So far in 2016, Express Scripts has underperformed the broad markets, with its stock down 23% year to date. Over the past 52 weeks, the stock is only down 20%.

Shares of Express Scripts were trading at $67.29 on Tuesday, with a consensus analyst price target of $91.32 and a 52-week trading range of $65.55 to $94.61.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.