J.P. Morgan Reiterates Overweight Rating On Medco Health Solutions

According to J.P. Morgan, Medco Health Solutions MHS $78 target price represents 34% upside from current levels. J.P. Morgan said that it believes the risk reward profile around Medco has improved substantially, and are reiterating the Overweight rating, noting that its $78 December 2011 target price represents 34% upside from current levels. “We continue to point to the positive fundamental outlook for the PBM industry, and believe several key factors should drive strong growth going forward, including generics, specialty pharmacy, and share buybacks. Medco shares trade at 14.4x our 2011 adjusted EPS estimate of $4.06, well below the historical average multiple of 18.6x and below our projected EPS growth rate over the next two years.” Medco Health Solutions closed yesterday at $58.33.