Please ensure Javascript is enabled for purposes of website accessibility

Why Express Scripts Gained 11% in August

By Demitri Kalogeropoulos - Sep 10, 2018 at 11:09AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Second-quarter results were strong enough to lift the company's sales outlook last month.

What happened

Express Scripts Holding Company (ESRX) outpaced the market by gaining 11% last month compared to a 3% jump in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The increase kept the stock ahead of the broader market so far in 2018, although shares have trailed indexes by a wide margin since early 2016.

So what

The pharmacy-benefit manager announced second-quarter earnings early in the month that included slightly lower sales and higher profits. Adjusted claims fell 3.5% to match management's forecast while adjusted earnings rose thanks to cost cuts and prescription product upsells. "We are having a strong selling season across both commercial and health plans," CEO Tim Wentworth said in a press release.

A customer picks up a prescription.

Image source: Getty Images.

Now what

Wentworth and his team lifted several of their operating forecasts for the fiscal year ahead thanks to rising retention rates and improved demand. Meanwhile, executives still expect to be acquired by Cigna in a deal that's likely to close before the end of 2018. That process took a big step forward when shareholders voted to approve the proposed merger on Aug. 24.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Express Scripts Holding Company Stock Quote
Express Scripts Holding Company
ESRX

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.