On Feb 11, 2013 we retained
) at Neutral after the company beat Zacks Consensus Estimates for
revenues and earnings in second quarter fiscal 2013. The results
came despite a drop in revenue following the end of the contract
Express Scripts Holding Company
Why the Retention?
On February 5, Cardinal Health posted second-quarter fiscal
2013 adjusted earnings of 93 cents per share, beating the Zacks
Consensus Estimate of 85 cents per share and surpassing the
year-ago earnings of 81 cents a share. Revenues in the reported
quarter dropped 7% year over year to $25,232 million, beating the
Zacks Consensus Estimate of $24,598 million.
Over the past 30 days, the Zacks Consensus Estimate for fiscal
2013 has moved up by just 3 cents to $3.47 while for fiscal 2014
it has remained stagnant at $3.76 during the same timeframe.
For fiscal 2013, Cardinal narrowed its forecast for adjusted
earnings per share from continuing operations to a band of $3.42
and $3.50 from $3.35 to $3.50 earlier.
Cardinal stands to gain from the gradual shift in mix from
bulk to the higher margin non-bulk sector of the Pharmaceutical
segment. Its mainstay Pharmaceutical segment is heavily
influenced by the generic wave. Overall, Cardinal is benefiting
from a spate of tuck-in acquisitions and capital deployment
strategies. The company continues to deploy capital to boost
investor confidence via share repurchases and dividend hikes.
However, Cardinal faces tough competition across all its business
segments, which may continue to pressure pricing and margins.
Other Stocks to Consider
Cardinal Health currently carries a Zacks Rank #3 (Hold).
Rite Aid Corporation
) carry Zacks Rank #1 (Strong Boy) and Zacks Rank #2 (Buy),
respectively, and are expected to do well.
AMERISOURCEBRGN (ABC): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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