Will This Price Target Increase Help Express Scripts (ESRX) Stock Today? (Update)

Update (9:37 a.m.): Updated with Wednesday market open information.

NEW YORK (TheStreet) -- Leerink increased its price target on Express Scripts  (ESRX) to $85 from $80 and set an "outperform" rating. The firm noted the company should benefit from a 10-year contract with WellPoint.

The stock was up 0.32% to $69.81 at 9:36 a.m. on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates EXPRESS SCRIPTS HOLDING CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXPRESS SCRIPTS HOLDING CO (ESRX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EXPRESS SCRIPTS HOLDING CO's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXPRESS SCRIPTS HOLDING CO increased its bottom line by earning $2.31 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($4.87 versus $2.31).
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • ESRX, with its decline in revenue, underperformed when compared the industry average of 16.8%. Since the same quarter one year prior, revenues slightly dropped by 9.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Health Care Providers & Services industry and the overall market, EXPRESS SCRIPTS HOLDING CO's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ESRX Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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