Analyst Robert Willoughby says while fourth-quarter earnings are in line, the $1.45 to $1.53 fiscal 2005 earnings per share estimate is below the previous forecast. He cut the fiscal 2005 (June) earnings per share estimate to $1.60 and cut the fiscal 2006 estimate to $1.80 on worse-than-expected government reimbursement levels and increased competition in key therapeutic franchises.
He also lowered the $34 target to $32. However, he believes the guidance reflects a worse-case reimbursement scenario. He thinks investors will regain confidence on addtional accretive acquisitions, new product indications, and a ramp-up of the Medco Health Solutions relationship over the course of fiscal 2005. He maintains the buy rating.