Earnings Preview: MedcoHealth Solutions

MedcoHealth Solutions (MHS) is expected to report Q4 earnings with a conference call scheduled Tuesday, February 19 at 8:30 a.m. ET.

Guidance

Analysts are looking for a profit of 41c on revenue of $11.47B. The consensus range is 39c to 47c for EPS, and revenue of $10.88B to $12.01B, according to First Call. As a prescription benefits manager, PBM, MedcoHealth profits when blockbuster drugs go generic. When Wyeth (WYE) announced the launch of a generic version of Protonix, MedcoHealth shares jumped.

Analyst Views

Morgan Stanley sees slowing earnings growth from retirees and believes UnitedHealth (UNH) could take business in house. UBS downgraded the stock to Neutral from Buy citing a slowing generic pipeline and limited earnings upside. Banc of America reiterated its Buy rating saying the company is poised to report strong results for this quarter.