Express Scripts Holding Company ESRX is one of the top-performing stocks in the MedTech space now. The company is expected to benefit from its exclusive range of medical and PBM services. A solid long-term view instills investors’ optimism.
In a year’s time, shares of Express Scripts have rallied 23.9% compared with the industry's 8.2% growth. The current level is also higher than the S&P 500 index’s gain of 1.9%.
The stock currently carries a Zacks Rank #2 (Buy).
For investors’ notice, Express Scripts announced that it is getting acquired by Cigna Corporation, a global health insurance company. For investors’ notice, Express Scripts will no longer provide financial guidance because of the acquisition agreement. The acquisition is expected to be completed by Dec 31, 2018. Under the terms of the deal, Cigna will pay $48.75 in cash and 0.2434 shares of stock of the newly combined company. Upon closure, Express Scripts’ shareholders will own approximately 36% of the combined company.
What’s Favoring the Stock?
Deal With Walmart
Express Scripts and retail giant Walmart recently announced a three-year agreement to deliver affordable prescription solutions to underinsured and uninsured Americans. Financial terms of the deal have been kept under wraps. In the latest initiative, Express Scripts and Walmart plan to increase affordable access of the prescription drugs for insured and uninsured Americans.
A news report by Forbes reveals that the number of people in the United States without health insurance has risen to 15.5% as of May 2018, up from 12.7% two years ago. Considering the growing number of uninsured American populace, the latest development seems to be a timely one.
Strong demand for the company’s solutions like SafeGuardRx, 90-day supply for chronic medications, Accredo Specialty Pharmacy and advanced opioid solutions buoy optimism. Through each of these programs as well as many others, Express Scripts delivers superior care to patients at an affordable cost.
The company recently announced the launch of an innovative 12-month pilot for a performance-based retail pharmacy network for commercial plans designed to optimize medication therapy. Express Scripts is thus committed to improving patients' pharmacy experience.
Which Way Are Estimates Treading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at $2.67, reflecting year-over-year growth of 23.6%. The same for revenues stands at $26 billion, mirroring 2.5% improvement year over year.
For 2018, the Zacks Consensus Estimate for earnings is pinned at $9.08, reflecting 1.8% growth from the previous-year number. The same for revenues is pegged at $101.9 billion, indicating a rise of 1.8%.
Express Scripts Holding Company Price and Consensus
Express Scripts Holding Company Price and Consensus | Express Scripts Holding Company Quote
Stocks to Consider
A few better-ranked stocks in the broader medical space are Quidel Corporation QDEL, STAAR Surgical Company STAA and Illumina, Inc ILMN.
Quidel has long-term expected earnings growth rate of 25% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
With a Zacks Rank #1, STAAR Surgical delivered average four-quarter positive earnings surprise of 400%.
Illumina’s long-term earnings growth rate is projected at 23.4%. The stock carries a Zacks Rank #2.
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