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The health care company's acquisition by pharmacy benefit manager
Express Scripts(ESRX) is expected to be ruled on by the Federal Trade Commission as soon as Friday, according to
"Express Scripts ESRX and Medco MHS announced Wednesday that they may be able to close their merger as soon as next week," Morningstar analysts wrote in a report on Wednesday. "As we previously indicated, we plan to raise our fair value estimate for Express Scripts to $73 and for Medco to $88. We believe the merger has the potential to create significant revenue and cost synergies."
Shares of Medco hit a 52-week high Wednesday of $72.50. The stock's 52-week low of $44.60 was set on Oct. 4.
Medco has an estimated price-to-earnings ratio for next year of 14.95 times; the average for health care providers is 17.78. For comparison,
Cigna(CI) has a lower forward P/E of 7.79 times; Express Scripts' forward P/E is 13.01.
Thirteen of the 20 analysts who cover Medco rated it hold. Six analysts gave the stock a buy rating and one rated it sell.
TheStreet Ratings gives Medco a B grade with a buy rating and a
$79.51 price target. The stock has risen 27.67% year to date.