What’s in Store for Express Scripts’ (ESRX) Q3 Earnings?
Express Scripts Holding Company ESRX is expected to report third-quarter 2018 results on Oct 23, after market close. Subdued Pharmacy Benefit Management segment (PBM) performance is likely to hurt the company’s results this earnings season. Meanwhile, the guidance is impressive.
Express Scripts has an average positive earnings surprise of almost 1.2% for the trailing four quarters.
Q2 Results.
In the last reported quarter, Express Scripts posted adjusted earnings of $2.22 per share, which beat the Zacks Consensus Estimate of $2.20. Adjusted earnings improved 28.3% year over year.
Revenues of $25.64 billion also surpassed the Zacks Consensus Estimate of $5.36 billion. Revenues showed an improvement of 1.2% year over year.
Which Way Are Estimates Treading?
For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $25 billion, reflecting a 1.3% rise. The same for earnings is pegged at $2.42, indicating an increase of 27.4%.
Let’s delve into the factors that are likely to have an impact on third-quarter 2018 results.
Express Scripts Holding Company Price and Consensus.
Express Scripts Holding Company Price and Consensus | Express Scripts Holding Company Quote.
PBM in Focus.
Express Scripts is the largest PBM in North America. The company has been consistently trying to expand the core PBM business. The Zacks Consensus Estimate for PBM revenues is pegged at $23 billion, reflecting a year-over-year decline of 1.9%.
In fact, in the last reported quarter, the company witnessed year-over-year declines in patient claims.
However, it is encouraging to note that Express Scripts has seen a slew of developments in the PBM wing earlier this year. For instance, the PBM giant is currently taking action to improve affordability and access of patients to affordable generic drugs.
Last month, the company’s subsidiary, Inside Rx announced the addition of 14 new medications to its brand medications list per the Inside Rx prescription savings card. The program now offers discounts to over 130 brand-name drugs to patients who are uninsured or underinsured and pay the retail price for their medications.
We believe that such positive developments are likely to offset the predicted fall in PBM revenues.
Other Factors at Play.
For the quarter to be reported, adjusted earnings per share are estimated in the range of $2.40-$2.45, reflecting growth of 26-29% from a year ago. The company expects total adjusted claims for the third quarter in the band of 330-340 million, of which 275-285 million is attributable to the core business.
It is encouraging to note that in the last reported quarter, management announced that the company expects to make approximately $140 million of investments toward enterprise value initiatives for 2018. Notably, this is expected to contribute $65-$75 million of savings in 2018. This is likely to result in cumulative savings of nearly $1.2 billion by 2021.
Express Scripts Getting Acquired.
Express Scripts recently announced that it is getting acquired by Cigna Corporation, a global health insurance company. In fact, in August, stockholders of the company approved the proposed acquisition of Express Scripts by Cigna. Per the definitive agreement, Cigna will take over Express Scripts in a cash and stock transaction worth $67 billion.
Per Moody’s Investors Service, Express Scripts is likely to see higher-than-typical customer losses in the days to come.
What Does Our Model Say?
Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise in the quarter. This is not the case here as you will see below.
Earnings ESP: Express Scripts has an Earnings ESP of -0.68%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Express Scripts carries a Zacks Rank #3.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks Worth a Look.
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Bio-Rad Laboratories BIO has an Earnings ESP of +9.60% and a Zacks Rank #3.
Baxter International Inc BAX has an Earnings ESP of +0.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo Corporation MASI has an Earnings ESP of +0.98% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.
CNH Industrial tops earnings forecasts in Q3 and guides for smaller FY sales drop.
GLOBAL MARKETS-Shares and bonds soar as Biden edges toward victory.
UK’s COVID borrowing not sustainable, will need to balance finances — Sunak.
IBM unveils cloud for 5G telcos, gets Nokia and Samsung as partners.
Saudis Cut Oil Prices for Asia as Virus Clouds Energy Market.
Analysis: Wall Street cheers U.S. election removing major tax-hike threat.
Biden has proposed raising the capital gains tax rate from 20% to 39.6% for those making over $1 million, which would represent a big blow to the asset management industry. Other tax hikes he has put forward include increasing the statutory corporate income tax rate from 21% to 28%. Biden was leading in key Midwestern states in the race for the White House as votes were being counted on Wednesday afternoon, but President Donald Trump’s Republican Party was poised to keep control of the Senate even as Democrats retained their majority in the House of the Representatives.
Alibaba Tops Q2 Earnings Forecast, Revenues Rise 30%, Beating Yuan Forecasts But Missing U.S. Dollar Estimates.
Alibaba Holding Group said its second quarter revenues jumped more than 30% from last year to a U.S. dollar equivalent of $22.8 billion.
Why don’t you like this ad?
Ad Young Trader Has Quietly Made Over $2.8MM In 2020.
With no prior experience, Kyle Dennis decided to invest in stocks. He owes his success to these strategies.
Dave Ramsey warns: Don’t do these 10 things with your money.
The financial expert and radio host says Americans stay poor because of these blunders.
Jeff Bezos Sells Another $3B Worth Of Amazon Shares.
Amazon Inc (NASDAQ: AMZN) CEO Jeff Bezos has offloaded $3 billion worth of the e-commerce company’s shares this week, according to filings with the U.S. Securities and Exchange Commission on Wednesday.What Happened: Bezos’s beneficial ownership filings show that a total of one million common stock shares were sold on Monday and Tuesday. The transactions were part of Amazon’s 10b5-1 trading plan — a strategy that allows company insiders to sell stocks at preset parameters.With the recent sale, Bezos has sold off more than $10 billion worth of Amazon shares this year, but still holds over 10% stake in the tech company.In August, the billionaire entrepreneur and investor sold off billion worth of shares in the price range of $3,102.85 and 3,183.26. Bezos had earlier sold shares worth about $4.1 billion between January and February.Why Does It Matter: Bezos, in 2018, disclosed that he sells about $1 billion worth of Amazon shares annually to fund Blue Origin LLC — the aerospace equipment manufacturing company he founded in 2000. In 2019, Bezos had sold Amazon common stock worth around $2.8 billion.Benzinga’s Take: Bezos isn’t selling his shares on the open market, and 10b5-1 sales like these are common for the Amazon CEO to fund other ventures of his interests, including Blue Origin and philanthropic work. This event doesn’t necessarily reflect Bezos’s views on Amazon’s future stock performance.Price Action: AMZN closed 6.32% higher at $3,241.16.Photo courtesy of Seattle City Council via FlickrSee more from Benzinga * Click here for options trades from Benzinga * Spotify Rolls Out Standalone Streaming On Apple Watch App: TechCrunch * A Chinese Company’s Stock Is Surging — Thanks To Trump(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
I have a seven-figure nest egg — am I saving too much for retirement?
I recently had a conversation with a colleague about retirement and was told I’m saving too much! My wife and I are both 57 and have been aggressive savers ever since my brother, an institutional retirement financial expert, told us to max out our savings when we were 25 years old.
Why don’t you like this ad?
Ad #1 Options Trading Guide [Now Free]
20+ Year Trading Legend Jeff Bishop Shares His Top Strategies in A Free Guide.
GM Earnings Crush Estimates With Surprise Surge; Stock Pops.
GM earnings beat after it reported strong North American truck demand in Q3, following a pandemic hit in prior quarters.
How billionaire Jack Ma fell to earth and took Ant’s mega IPO with him.
Tell that to Jack Ma. Corporate China’s shiniest star was just days away from seeing his Ant Group list on the stock market in a record $37 billion deal, when he chose to launch a blistering public attack on the country’s financial watchdogs and banks. The regulatory system was stifling innovation and must be reformed to fuel growth, billionaire Ma told a summit in Shanghai on Oct. 24 attended by the great and the good of China’s financial, regulatory and political establishment.
Teva’s stock gains as it meets earnings expectations for the third quarter.
Shares of Teva Pharmaceutical Industries Ltd. gained 0.4% in premarket trading on Thursday after it beat revenue expectations for the third quarter. The Israeli drug maker had a loss of $4.3 billion, or $3.97 per share, in the third quarter of 2020, compared to a loss of $307 million, or 29 cents per share, in the same quarter a year ago. Adjusted earnings per share were 58 cents, matching the FactSet consensus. Teva had revenue of $3.9 billion for the quarter, down from $4.1 billion in the same period a year ago. The FactSet consensus was about $4.0 billion. The company attributed the decline to lower sales in its generic and over-the-counter businesses, as well as for Copaxone, its flagship multiple sclerosis product, which reported a 13% decline in sales, to $236 million in North America. It also reported lower demand for certain therapies as a result of the COVID-19 pandemic. Sales of Parkinson’s disease drug Austedo jumped 60% to $168 million for the quarter in North America. Teva’s stock is down 2.8% for the year, compared with the S&P 500 , which has gained 6.6%.
A divided government could lead to massive stock market gains: strategist.
Gridlock in D.C. could be good for the stock market. really good, historical data shows.
Biden, Trump, Qualcomm, Alibaba, Apple — 5 Things You Must Know Thursday.
Joe Biden is closer to securing the U.S. presidency; stock futures rise and the tech sector leads on the potential for a divided U.S. government; Qualcomm soars after an earnings beat; the Fed issues a decision on interest rates.
Tesla Gets Order For 150 Semi Trucks From Canadian Company As It Prepares For ‘Volume Production’
Tesla Inc (NASDAQ: TSLA) has received an order for 150 units of its Semi electric truck from a Mississauga, Canada-based trucking conglomerate.What Happened: Pride Group Enterprises announced Wednesday in a statement that it had placed a deposit to secure the initial units and build slots and would further consider purchasing up to 500 trucks.»We believe that electrification is the way of the future as we work together across multiple industries to reduce our carbon footprint,» Pride Group CEO Sam Johal said.»Pride Group Enterprises’ vision is to invest in facilities that will support charging, full-service maintenance and a consistent supply of electric trucks on North American highways.»The company said it was busy investing in the necessary infrastructure needed for parking, charging and maintenance at its locations to support the arrival of the all-electric class 8 trucks.Why It Matters: Privately-held Pride Group has 12 locations in the United States and Canada. The 300-employee company had a five-year growth rate of 2,365% as of September last year, according to Canadian Business.Pride Group’s order is larger than the 130 units ordered by Walmart Inc (NYSE: WMT) in Canada. Tesla CEO Elon Musk said this summer that it was time to bring the Semi truck to «volume production.» The company had unveiled two concept vehicles in November 2017 with production slated to commence in 2021 at the time. Price Action: Tesla shares closed nearly 0.7% lower at $420.98 on Wednesday and gained 0.34% in the after-hours session.Photo courtesy: Tesla See more from Benzinga * Click here for options trades from Benzinga * Tesla Was A Month Away From Bankruptcy Ahead Of Model 3 Rollout, Says Musk * Tesla FSD Beta Is Next Rolling Out In Canada, Norway, Musk Says(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
IRS Boosts 2021 Income Limits For IRA Deductions.
There’s still time to benefit from 2020’s IRA contribution limits. And odds are that you haven’t put in the maximum allowed yet.
Buffett-Backed BYD Joins Nio, Xpeng In China Electric Car Sales Boom.
BYD joined fellow China electric car stocks Nio, Xpeng Motors and Li Auto in reporting robust October sales.