Citi is raising its earnings expectations and price target for Scripts Holding Co. after a "very strong" second quarter from the pharmacy benefits manager this month.
THE OPINION: Analyst George Hill said he was most impressed with the company's growth in its mail business and an increase in generic drug use, which helps profitability.
Express Scripts topped average analyst expectations for both earnings and revenue when it reported on its second-quarter performance Aug. 7.
Hill now expects 2012 earnings per share of $3.68, up from a previous forecast of $3.54. Hill also raised his price target on the stock to $70 from $63.
"We were clearly wrong with our overly cautious stance ahead of the quarter and missed the run in the shares," Hill wrote in a Thursday research note.
Analysts expect, on average, 2012 earnings of $3.68 per share from the St. Louis company, according to FactSet.
THE STOCK: Express Scripts shares have climbed more than 8 percent to top $60 since closing at $56.02 before the company reported second-quarter results.