Express Scripts (ESRX) Stock Continues to Drop After Anthem Lawsuit - TheStreet

NEW YORK (TheStreet) -- Shares of Express Scripts Holding Co. (ESRX) are slumping by 2.49% to $67.61 in early afternoon trading on Tuesday, after the St. Louis-based company was sued by health insurance provider Anthem (ANTM) yesterday.

Anthem is seeking to recover damages for alleged higher than competitive benchmark pricing from the pharmacy benefit management provider, as well as damages related to operational issues, the Indianapolis-based company said in a statement.

Anthem is suing Express Scripts for about $15 billion in damages, the Wall Street Journal noted.

An Express Scripts spokesman told the Journal that the company believes the suit is without merit, and that the company "has consistently acted in good faith and in accordance with the terms of its agreement with Anthem."

J.P. Morgan (JPM) analysts estimated that Express Scripts' 2016 earnings before EBITDA would be $7.3 billion, but without the Anthem contract would be about $6.4 billion, the Journal added.

Anthem has not decided whether to end its contract with Express Scripts at this time, the company said.

Shares of Anthem are lower by 0.4% to $139.44 on Tuesday morning.

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on the stock.

This is driven by some important positives, which should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: ESRX

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