Ahead of the Bell: Express Scripts plummets
NEW YORK (AP) — Shares of Express Scripts slid in premarket trading Tuesday after the pharmacy benefits manager warned that persistent high joblessness and economic uncertainty would make 2013 more challenging, and expectations of Wall Street analysts were too high.
Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies.
The St. Louis company handles more than a billion prescriptions each year after the $29.1 billion acquisition of a rival, Medco, in April.
Analysts were disappointed by the company's outlook. Investors will now question whether Express Scripts benefits as much from recent acquisitions as the company had led them to believe, said Citi analyst George Hill, calling the company's forecast "baffling."
Express Scripts had lifted its 2012 earnings forecast in August after recording better-than-expected savings from its combination with Medco.
Jefferies analyst Brian Tanquilut lowered his rating on Express Scripts to "Hold" from "Buy" and cut his price target on the shares by $14 to $56.
Shares of Express Scripts Holding Co. dropped $8.25, or 13 percent, to $54.63 before the opening bell. The stock was up 41 percent so far this year through Monday's trading.