February 1, 2018 / 3:01 PM / 10 months ago

BUZZ-Express Scripts: Put in slow lane after Bernstein downgrade

** Shares of pharmacy benefit manager Express Scripts down 1.7 pct at $77.87 in Thurs trading

** Bernstein downgrades ESRX to “underperform” from “market perform”, PT of $69

** Lead analyst Lance Wilkes sees margins coming under pressure from competition from health insurer-owned pharmacy units and increasingly sophisticated clients, adding that benefits from tax reform appear priced into the stock

** Wilkes also points to risk of Amazon entering pharmacy although he says one potential upside risk would be if Walgreens acquires ESRX as a defensive move

** ESRX fell 3.2 pct on Tues, a rough day for healthcare service shares as Amazon, Berkshire Hathaway and JPMorgan Chase & Co said they will form a healthcare company aimed at cutting costs for their U.S. employees

** Express Scripts also announced contract win with Health Canada on Thurs, possibly mitigating stock’s losses

** 10 analysts rate ESRX “buy” or stronger, 10 rate “hold”, 3 rate “sell” or weaker, according to Thomson Reuters data; median PT is $80

** YTD, ESRX shares up 3.8 pct vs 6.5 pct rise for S&P 500 healthcare sector

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