Express Scripts Raises Its Outlook for Selling Season
Express Scripts (ESRX) reported a solid quarter, and we are reiterating our $89 fair value estimate and wide moat rating for the healthcare services player. Even with the recent announcement by Anthem that it will not renew its contract with Express, we believe Express remains in an advantaged position over the long term, and its 1.2 billion-1.3 billion prescription claims post-Anthem position it favorably to benefit from secular industry tailwinds. The firm’s client risk is now significantly lessened, as no other client apart from the Department of Defense makes up more than 10% of its business. We also believe Express’ independent model is a major positive, as it allows the healthcare services behemoth to offer more flexibility and options to its clients.
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