St. Louis, Missouri – Express Scripts has reported that their first quarter results were underwhelming. Though the company is still doing a desirable job by driving better profitability per claim, the volume of their overall claims was light and the company’s management expects this pattern may persist for the whole year. This prompted the company’s EPS guidance reduction per share to be $0.06.
Since the recession, Express Scripts’ main weakness has recently been in volume of claims, and this is due to a combination of losses and also weak capital prescription consumption. It is expected that stocks are going to be under a lot of pressure by perhaps 5% to 6%. It is emphasized that management’s ability in stimulating improved unit growth is the key for valuation expansion. Even with said guidance update disappointments, Express Scripts maintain to outperform their current rating in their stock, aiming for double digit profits and long term growth and also compelling valuation.
With big pressure rising on Express Scripts’ management team, they are aiming to stimulate big unit growth. Aggressive pricing is being put into consideration as the company move through another year of selling. The first quarter results were considered flat comparing to last year’s 8% excluding the big effect of United Health (UNH $75.20) that falls below Express Scripts’ target and even below consensus.