Morgan Stanley Maintains Overweight on Medco Health Solutions (MHS)

Morgan Stanley is out with its report today on Medco Health Solutions MHS, maintaining Overweight.

In a note to clients, Morgan Stanley writes, "Framing a bear case scenario, if MHS were to retain only 92% of its ~$17 billion in revenues up for renewal (mirroring CVS' renewal rates in the 2009/2010 season) as compared to
historical 99% retention rate, we quantify an EPS impact of ~ $0.10 to $0.15 to our 2012e EPS of $5.12. Under that scenario, ESRX may stand to gain share."

At the time of posting, shares of MHS were trading pre-market at $57, up 1.37% from Wednesday's close.