Nov 25 The recent sell-off of Express Scripts
Holding may be overdone, and the stock could rise 10
percent to 15 percent in the next 12 months, business weekly
Barron's said on Sunday.
Shares of the St. Louis-based pharmacy benefits manager
closed on Friday at $52.24, down about 21 percent from its high
for the year in early October.
Barron's said the slide in the stock's price began on Nov. 5
following a strong third-quarter earnings report and a slight
increase in its 2012 guidance. On the related conference call,
the company's CEO said analysts' estimates were too high, citing
the weak economy. Some analysts downgraded the stock, and some
investors bailed out.
"Express Scripts' sell-off has rendered its valuation
cheap," the newspaper said.
The price/earnings ratio, now 12 times consensus earnings
projections, as well as its enterprise value (net debt plus
market value), were both well below median levels, Barron's
The company's big opportunity going forward is in generic
drugs - particularly mail-order generic drugs, given that
branded drugs with annual aggregate sales of about $30 billion
are going off patent between now and 2015, Barron's said.