Sears, Express Scripts, Medco Are S&P 500 Gainers

NEW YORK ( TheStreet) -- Sears Holdings ( SHLD), Express Scripts ( ESRX) and Medco Health Solutions ( MHS) were among the best-performing stocks on the S&P 500 midday Thursday.

The S&P rose 2.39 points to 1,360.05.
Sears, Express Scripts and Medco are among the best-performing stocks on the S&P 500 stocks midday Thursday.

Shares of jumped rose 20.47% to $62.74. The retailer said Thursday it would try to raise about $1 billion from selling off or spinning out stores. Sears plans on selling 11 stores to General Growth Partners ( GGP) to the tune of about $270 million.

Sears also reported a fourth-quarter loss of $2.4 billion.

Five of the six analysts who cover Sears rated it sell; one analyst gave it a hold rating.

TheStreet Ratings gives Sears a D grade and sell rating. The stock has risen 97.42% year to date.

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Express Scripts rose 2.65% to $53. The pharmacy benefit manager reported fourth-quarter earnings Wednesday of $290.4 million, or 59 cents a share, down from year-earlier earnings of $329.6 million, or 62 cents.

Jefferies analysts raised their price target for Express Scripts to $60 from $55 on Wednesday based on its pending acquisition of Medco.

"ESRX's Q4 miss is irrelevant as the stock will continue to trade on the prospectsof the company's pending Medco acquisition," Jefferies analysts wrote in a report. "ESRX's Q4 miss resulted from higher expenses incurred to prepare for its upcoming integration of Medco and to avoid WAG-induced customer disruptions. Given our belief there is a high probability that this merger closes by the end of 1H without any material FTC concerns, we are raising our PT to $60 (from $55)."

Express Scripts has been working to close its merger with Medco, another pharmacy benefit manager, since the two signed a definitive merger agreement in July.

During a conference call, an Express Scripts executive said the conversation with Walgreen ( WAG) is "always open," according to Bloomberg. Express Scripts stopped covering in-network prescriptions that were filled at Walgreen at the start of this year.

Express Scripts has an estimated price-to-earnings ratio for next year of 12.55; the average for health care providers is 18.69. For comparison, both WellPoint ( WLP) and Cigna ( CI) both have lower forward P/Es of 7.77 and 7.38, respectively.

Twenty-one of the 24 analysts who cover Express Scripts rated it buy. Three analysts gave it a hold rating.

TheStreet Ratings gives Express Scripts a B grade with a buy rating and a $60.74 price target. The stock has risen 18.59% year to date.

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Shares of Medco rose 2.81% to $64.32. Its forward P/E is 13.53; the average for health care providers is 18.69. For comparison, both Aetna ( AET) and Humana ( HUM) have lower forward P/Es of 8.34 and 9.93, respectively.

Twelve of the 22 analysts who cover Medco rated it hold. Ten analysts gave it a buy rating.

TheStreet Ratings gives Medco a B grade with a buy rating and a $73.62 price target. The stock has risen 15.06% year to date.

-- Written by Alexandra Zendrian

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