With Medicaid And ACA Squared Away, Anthem Needs To Work On Medicare
Stephen Simpson, CFA
Stephen Simpson, CFA
Wed, May 4, 8:21 AM
- Anthem (NYSE:ANTM) promotes John Gallina, currently SVP, Chief Financial Officer for the Commercial and Specialty Business Division, to EVP and CFO effective June 1. He succeeds Wayne DeVeydt who will step down due to family commitments and philanthropic work. Mr. Gallina has been with the company since 1994.
Wed, Apr. 27, 9:47 AM
- Anthem (ANTM -3.2%) Q1 results: Revenues: $20,309.4M (+7.7%); Benefit Expense: $15,538.8M (+10.0%); SG&A: $3,200.2M (+1.7%); Net Income: $703M (-18.7%); EPS: $2.63 (-14.9%); Non-GAAP EPS: $3.46 (+10.2%); Quick Assets: $1,676M (-20.7%); CF Ops: $1,304.3M (-21.0%).
- 2016 Guidance: Operating Revenue: $81B - 82B; GAAP EPS: >$9.65; Adjusted EPS: >$10.80; CF Ops: >$3B; Medical Membership: 39.3M - 39.5M; Benefit Expense Ratio: 83.6% plus/minus 30 bps; SG&A Expense Ratio: 15.5% plus/minus 30bps.
Wed, Apr. 27, 6:02 AM
- Anthem (NYSE:ANTM): Q1 EPS of $3.46 beats by $0.14.
- Revenue of $20.31B (+7.7% Y/Y) beats by $450M.
Tue, Apr. 26, 5:30 PM
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Fri, Apr. 15, 11:46 AM
- Celator Pharmaceuticals (CPXX +4.6%) initiated with Buy rating and $24 (63% upside) price target by Needham.
- Retrophin (RTRX -1.7%) initiated with Outperform rating and $25 (67%upside) price target by BMO Capital.
- Fate Therapeutics (FATE -3.2%) initiated with Outperform rating and $4 (85% upside) price target by BMO Capital.
- Tobira Therapeutics (TBRA +4.4%) initiated with Buy rating and $22 price target by H.C. Wainwright.
- Wright Medical Group (WMGI +2.4%) initiated with Buy rating and $23 (21% upside) price target by Bank of America.
- Cleveland Research rates UnitedHealth Group (UNH -0.9%) a Buy with a $155 (22% upside) price target; Anthem (ANTM -0.5%) a Buy with a $170 (20% upside) price target and Aetna (AET -0.4%) Neutral with a $120 (10% upside) price target.
- Glaukos (GKOS +0.3%) initiated with Hold rating by Stifel.
- Baxter International (BAX -0.3%) upgraded to Overweight from Neutral by Piper Jaffray. Price target raised to $58 (36% upside) from $39.
- Baird upgrades Exactech (EXAC +0.7%) to Outperform from Neutral and raises the price target to $26 (18% upside) from $21. Stryker (SYK -0.9%) downgraded to Neutral from Outperform and raises the price target to $116 (6% upside) from $111.
- Tenet Healthcare (THC -2.5%) upgraded to Positive from Neutral by Susquehanna.
- Clovis Oncology (CLVS -1.5%) downgraded to Neutral from Overweight by JP Morgan. Price target lowered to $15 (7% upside) from $42.
- AstraZeneca (AZN +0.3%) downgraded to Sell from Neutral by Goldman Sachs. Price target lowered to 3,700p (11% downside risk) from 4,400p.
- Intercept Pharmaceuticals (ICPT +0.2%) downgraded to Underweight from Equal Weight by Morgan Stanley. Price target lowered to $80 (48% downside risk) from $100.
Tue, Apr. 5, 10:28 AM
- First Data (NYSE:FDC): "Despite its favorable debt maturity schedule (nothing due until 2018) and modest interest rate sensitivity (only approximately 1/4 of debt is floating), FDC appears to have suffered collateral damage in the recent high-yield credit market carnage. Nonetheless, we remain encouraged by FDC's positioning within the payment-processing ecosystem and continue to believe the company is well positioned to benefit from the secular trend toward electronic payments."
- T-Mobile USA (NASDAQ:TMUS): "T-Mobile's improving cash generation coupled with ongoing subscriber momentum reinforces our outperform rating. The company appears on track for 20% EBITDA growth in 2016/17. We continue to believe TMUS's standalone story is attractive with M&A upside [long term]."
- HCA: "We are recommending shares of HCA given strong Q4 results, a robust outlook, improved Affordable Care Act enrollment trends, and an attractive valuation. HCA's Q4 beat and bullish FY2016 outlook, released on January 29, 2016, were far in excess of expectations. Nevertheless, the stock has re-traced only a portion of its post-Q3 losses. Besides the Q3 earnings challenges, the market remains concerned with the outlook for the ACA, balance sheet leverage and mixed competitor results, but those concerns appear overblown. The stock is now trading at just 7.1x '16E EBITDA, which is a discount to the company's/industry's historical averages of 7.6x/8.6x."
- Expedia (NASDAQ:EXPE): Expedia is "our top long-term idea. The company is well positioned to gain online-travel share from its leading travel brands, solid management execution, and strategic deployment of capital. We believe the HomeAway acquisition is highly accretive, based on leveraging HomeAway's unique inventory with Expedia's online optimization capabilities. As a result, we forecast superior earnings growth that should result in significant shareholder value, in our view."
- FedEx (NYSE:FDX): "FedEx is lauded for its speed and service in its core FedEx Express segment, where it possesses the leading market share in 'express' parcel delivery in the U.S., as well as a strong position in its emerging FedEx Ground segment, both of which (particularly Ground) are benefiting from an e-commerce tailwind, which we estimate is driving formidable revenue growth in business-to-consumer. Anticipating a gradual economic recovery in the US/globally, we expect margin expansion via improved efficiencies and capital utilization, coupled with a realignment plan likely to meet/exceed targeting improved annual profitability of $1.65 billion by FY16."
- CVS: "The company continues to do well in the PBM (pharmacy benefit management) segment, taking new market share ($12.7 billion net new business) while integrating the newly acquired Omnicare and Target pharmacies. We believe that CVS's focus around building solutions that span the continuum of care will resonate well with clients. Near term, the continued strength in new PBM business and acquisition synergies will likely drive the upside. CVS's focus on delivering shareholder returns in multiple avenues - earnings growth, share buybacks and dividends, makes it very attractive, especially in this turbulent market."
- Fidelity National Information Services (NYSE:FIS): "The SunGard integration appears ahead of plan; we would not preclude upside synergies (i.e., above $200 million FY17 exit rate). FIS currently trades at approximately 14x our FY17E EPS, which we believe remains attractive."
- Coach (NYSE:COH): "With Creative Designer Stuart Vevers' influence on full-price channel for five quarters and impact on outlet at approximately 90% this [past holiday season], we are starting to see signs of stabilization of Coach brand in North America. All in all, at 17% operating margins (31% just two years ago) and early signs of brand inflection, COH is playing better offense, despite moderation in growth of overall handbag category, and likely stands to benefit from biggest competitor KORS slowing."
- WESCO (NYSE:WCC): "We believe WCC's hires into key strategic leadership positions in recent years support improved guidance rigor and represent a long-term investment in deeper organizational productivity potential across sales & marketing, supply chain, and IT (new CIO most recently). WCC remains positioned to drive long-term market share gains in the fragmented U.S. electrical distribution market in our view, as nonresidential and industrial capex markets recover. We note meaningful leverage to a sustained and more broad-based recovery and attractive long-term investment characteristics."
- Anthem (NYSE:ANTM): "Overall, while the Exchanges continue to cause shorter-term pressure, we think improvements to this business, along with the potential accretion from Cigna remain attractive long-term catalysts for the company. As a result, we maintain our Outperform rating."
Mon, Mar. 21, 12:01 PM
- Anthem (ANTM -1.6%) sued Express Scripts (ESRX -1.4%) earlier today to recover damages for pharmacy pricing that it says is higher than competitive benchmarks. The company says the pharmacy benefits manager has failed to negotiate in good faith to ensure that Anthem receives competitive pricing, despite its efforts address the issue for more than a year. Anthem says it is owed $3B, a figure Express Scripts chief George Paz says he has "no clue" where it comes from.
- Anthem also says it has not yet made a decision on whether to terminate its contract with the company.
- Previously: Express Scripts still squabbling with Anthem over drug discounts (Feb. 18)
Thu, Feb. 18, 4:35 PM
- Anthem (NYSE:ANTM) declares $0.65/share quarterly dividend, 4% increase from prior dividend of $0.625.
- Forward yield 2.03%
- Payable March 25; for shareholders of record March 10; ex-div March 8.
Thu, Feb. 18, 10:35 AM
- Behemoth pharmacy benefits manager Express Scripts (ESRX -0.7%) has apparently made scant progress in its contentious negotiations with its largest customer, Anthem (ANTM +1.1%), over drug discounts. In its earnings call yesterday, CEO George Paz said he "has no clue" where the $3B that Anthem says it is owed in additional prescription drug savings under their 10-year contract comes from.
- The risk that ESRX may lose its largest client when their contract ends after 2019 has weighed on its stock price. Shares are down over 20% this year. Even if they resolve their differences, though, Anthem may still bid adieu if its merger with Cigna (CI +0.4%) goes through (likely) and it decides to manage prescriptions internally, a move that UnitedHealth (UNH +0.7%) has already done.
- Anthem represents 14% on ESRX's revenue but much less of its profit. It processed almost 1.3B claims last year and will most certainly process over 1B claims annually beyond 2019 exclusive of Anthem.
- Previously: Anthem to acquire Cigna for $54.2B (July 24, 2015)
Fri, Feb. 12, 7:59 AM
- Health insurer Anthem (NYSE:ANTM) establishes coverage of Novocure's (NASDAQ:NVCR) Optune for the treatment of newly diagnosed glioblastoma. Anthem, covering 38.5M lives, is the fourth commercial payer to cover the use of the product.
- Optune is a non-invasive device that creates alternating "wave-like" electric fields called Tumor Treating Fields (TTFields). It delivers its therapy to brain tumors through four transducer arrays placed on the scalp.
- Shares are up 3% premarket but only on 200 shares.
Wed, Jan. 27, 7:51 AM
- Anthem (ANTM -0.6%) Q4 results: Revenues: $20,023.7M (+6.6%); Benefit Expense: $16,315.5M (+9.8%); SG&A: $3,268.4M (+7.8%); Net Income: $180.9M (-64.3%); EPS: $0.68 (-62.2%); Non-GAAP EPS: $1.14 (-38.7%).
- FY2015 results: Revenues: $78,404.8M (+7.4%); Benefit Expense: $61,116.9M (+7.5%); SG&A: $12,534.8M (+6.7%); Net Income: $2,560M (unch); EPS: $9.38 (+4.3%); Non-GAAP EPS: $10.16 (+8.7%); Quick Assets: $2,113.5M (-1.8%); CF Ops: $4,116M (+22.2%).
- 2016 Guidance: Operating Revenue: $80B - 81B; GAAP EPS: >$10.35; Adjusted EPS: >$10.80; CF Ops: >$3B; Medical Membership: 38.8M - 39M; Benefit Expense Ratio: 83.6% plus/minus 30 bps; SG&A Expense Ratio: 15.4% plus/minus 30bps.
Wed, Jan. 27, 6:03 AM
- Anthem (NYSE:ANTM): Q4 EPS of $1.14 misses by $0.06.
- Revenue of $20.02B (+6.6% Y/Y) beats by $120M.
Tue, Jan. 26, 5:30 PM
Fri, Jan. 22, 8:38 AM
- Zafgen's (NASDAQ:ZFGN) recent bullish action gets some attention: FBR & Co. upgrades to Outperform from Market Perform. Price target raised to $20 (120% upside) from $9; RBC Capital upgrades to Outperform from Sector Perform. Price target raised to $21 (131% upside).
- Anthem (NYSE:ANTM) upgraded to Buy from Neutral by Goldman Sachs. Price target raised to 168 (21% upside) from $160.
- Kite Pharma (NASDAQ:KITE) upgraded to Outperform from Market Perform by FBR & Co. Price target raised to $75 (47% upside) from $72.
- AstraZeneca (NYSE:AZN) upgraded to Equal Weight from Underweight by Barclays. Price target raised to ₤50 from ₤44.
- LifePoint Health (NASDAQ:LPNT) downgraded to Neutral from Buy by Goldman Sachs. Price target lowered to $78 (17% upside) from $81.
Wed, Jan. 13, 8:28 AM
- According to Bloomberg, heath insurer Anthem (NYSE:ANTM) is aiming to get an additional $3B per year in drug discounts from pharmacy benefits manager (PBM) Express Scripts (NASDAQ:ESRX) and, if it doesn't get it, is threatening to take its business elsewhere.
- Anthem CEO Joseph Swedish commented on the tussle yesterday at the J.P. Morgan Healthcare Conference in San Francisco. "We are entitled to improved pharmaceutical pricing that equates to an annual value capture of more than $3B. To be clear, this is the amount by which we would be overpaying for pharmaceuticals on an annual basis. Much of those savings would be passed on to clients."
- Anthem has an unusual relationship with Express under which it is entitled to periodic reviews of the prices it pays for drugs, the last of which occurred in 2012. The arrangement stems from Anthem's sale of its PBM business to Express in 2009.
- Express spokesman Brian Henry says that Anthem is mischaracterizing the situation, adding, "Express Scripts has consistently acted in good faith and is in full compliance with the terms of its agreement. While the contract calls for good faith negotiations regarding a pricing review, it does not mandate specific price adjustments. Furthermore, Anthem is not entitled to $3B."
- Negotiations are ongoing. If Anthem makes good on its threat, it only has two choices of PBMs, CVS Health (NYSE:CVS) and UnitedHealth Group's (NYSE:UNH) OptumRx. According to Evercore ISI's Ross Muken, Anthem's exit would shave $0.80 per share off ESRX's earnings.
- ESRX is down 5% premarket on light volume.
Wed, Jan. 13, 3:23 AM
- Although still under review by the Justice Department, Aetna (NYSE:AET) Chief Executive Mark Bertolini expects the company's $37B acquisition of rival Humana (NYSE:HUM) to close this year.
- "So far, we have nothing to believe it will be any slower than that, or any faster," Bertolini said in an interview at the JP Morgan Healthcare conference.
- Anthem (NYSE:ANTM) CEO Joseph Swedish also anticipates the firm's $47B merger with Cigna (NYSE:CI) to close in 2016 - moves that will further consolidate the U.S. health insurance industry.