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AMZN

Amazon.com

$1,176.75

15.48 (1.33%)

, CVS

CVS Health

09:23
12/01/17
12/01
09:23
12/01/17
09:23

Amazon unlikely to begin selling drugs soon, CNBC says

CNBC's David Faber points to Freedom of Information Act requests that indicate that in at least seven states where Amazon (AMZN) filed with pharmaceutical regulators it said it was only seeking to sell medical devices and equipment, not pharmaceuticals. Drug distributers McKesson (MCK), AmerisourceBergen (ABC) and Cardinal Health (CAH), as well as retail pharmacy operators CVS Health (CVS) and Walgreens (WBA), have been active in recent weeks on several occasions when headlines crossed regarding Amazon's potential intentions in the pharmaceutical and healthcare space.

AMZN

Amazon.com

$1,176.75

15.48 (1.33%)

CVS

CVS Health

WBA

Walgreens Boots Alliance

$72.76

0.84 (1.17%)

MCK

McKesson

CAH

Cardinal Health

ABC

AmerisourceBergen

  • 12

    Dec

  • 18

    Mar

AMZN Amazon.com
$1,176.75

15.48 (1.33%)

12/01/17
WELS
12/01/17
NO CHANGE
WELS
Wells not seeing Amazon talks as good news for Mylan, others
CNBC last night reported that Amazon.com (AMZN) is in exploratory talks with Mylan (MYL) and Novartis' Sandoz (NVS) regarding a potential entry into the pharmacy space. While the market might consider this good news for Mylan and other generics as a sign of potential preferred supplier agreements, Wells Fargo analyst David Maris says he's more cautious. Amazon entering the pharmacy market could be a negative headwind for retail generics and potentially branded over-the-counter products, Maris argues. He believes Amazon would source at competitive prices and that "increased price transparency may cause traditional retailers to push harder for price concessions."
12/01/17
WELS
12/01/17
NO CHANGE
Target $1525
WELS
Outperform
Amazon price target raised to $1,525 from $1,430 at Wells Fargo
Wells Fargo analyst Ken Sena raised his price target for Amazon.com (AMZN) to $1,525 to reflect increased outer-year estimates for Web Services as well as a higher sum-of-the-parts valuation. The stock closed yesterday up $15.48 to $1,176.75. The analyst highlights the "very successful" five-day Amazon Wed Services conference in Las Vegas, "record-breaking" early holiday sales data, and another healthcare industry development with CNBC reporting the company is in talks with generic manufacturers Mylan (MYL) and Novartis (NVS). Sena sees an increasing likelihood that Amazon "ultimately becomes a disruptor" in healthcare, with generics representing a potential point of entry. The Wells Fargo Healthcare team sees generics as a "simple entry point" in pharma as it involves many players with ready supply and a price competitive market, Sena tells investors in a research note. The analyst keeps an Outperform rating on Amazon.
12/01/17
BMOC
12/01/17
UPGRADE
Target $142
BMOC
Outperform
VMware upgraded to Outperform at BMO Capital on faster computing growth
As reported earlier, BMO Capital analyst Keith Bachman upgraded VMware (VMW) to Outperform from Market Perform and raised his price target to $142 from $136. Bachman says the company is benefiting from improved on-premise spending trends, increasing his projections for the overall FY19 computing spend to grow 3% versus prior forecast of 1-2% decline. The analyst also says that management is being conservative in suggesting that the partnership with AWS (AMZN) would not generate returns for the next 2 years after attending AWS re:Invent this week.
12/01/17
OPCO
12/01/17
NO CHANGE
Target $1330
OPCO
Outperform
Amazon.com price target raised to $1,330 from $1,165 at Oppenheimer
Oppenheimer analyst Jason Helfstein raised his price target for Amazon.com to $1,330 after the company's Web Services announced dozens of new services focused on databases, Internet-of-Things and serverless functionality. AWS is now well positioned to be the platform company for IoT and democratizing artificial intelligence, Helfstein tells investors in a research note. The analyst believes Amazon's pace of innovation is strong and keeps an Outperform rating on the name.
CVS CVS Health

11/21/17
LEER
11/21/17
NO CHANGE
Target $85
LEER
Outperform
CVS deal with Aetna a long-term positive, says Leerink
Leerink analyst David Larsen believes that a potential CVS (CVS)/Aetna (AET) combination would provide significant long-term value to both shareholders and clients. The analyst believes that CVS may be able to more effectively tie reimbursement to performance for specialty drugs, procurement synergies may exist for Red Oak, and CVS may be able to capture more Aetna volumes. While there would likely be a second request, and lengthy review process, Larsen believes the deal would eventually clear regulatory review. He reiterates an Outperform rating and $85 price target on CVS shares.
11/20/17
11/20/17
NO CHANGE

Amazon disruption of healthcare 'a foregone conclusion,' says Morgan Stanley
Morgan Stanley's U.S. Internet and Healthcare teams collaborated on a report exploring Amazon's (AMZN) entry into healthcare, stating that it will likely take time but that the e-commerce giant's "disruption of healthcare is a foregone conclusion." While retail plays to Amazon's strengths with the highest profits and lowest barriers to entry, retailers like CVS (CVS) and Walgreens (WBA) have the most opportunities to adjust their business models and lower costs to defend against Amazon, the teams tell investors. Medical supply and Life Sciences distribution are "less rich" targets, but look like "low-hanging fruit," the analysts added. Cardinal Health (CAH) has the most exposure via its medical supply distribution segment, said the firm, which downgraded Cardinal to Underweight from Equal Weight, as previously reported. McKesson (MCK) also has some, but less, risk and AmerisourceBergen (ABC), which doesn't distribute medical supplies, remains immune in the near-term, the firm concluded. Others in healthcare distribution facing the most share and/or margin risk from Amazon include Thermo Fisher (TMO), Henry Schein (HSIC) and Patterson (PDCO), the firm added.
11/30/17
JEFF
11/30/17
NO CHANGE
JEFF
Jefferies sees drugstore sentiment improving with no Amazon news
Investors were anticipating an announcement from Amazon.com (AMZN) regarding a pharmacy strategy around Thanksgiving due to recent media reports and the resulting sell-side speculation, Jefferies analyst Brian Tanquilut tells investors in a research note. With no Amazon pharmacy entry announced one week removed from the holiday, the analyst believes investor sentiment over the drug supply chain may gradually improve, at least in the near-term. He notes that the price-to-earnings multiples of Walgreens Boots Alliance (WBA) and CVS Health (CVS) have already declined amid speculation of an Amazon entry. Tanquilut acknowledges, however, that the Amazon overhang will not completely go away. The analyst has Buy ratings on UnitedHealth (UNH) and Walgreens, and Hold ratings on AmerisourceBergen (ABC), Cardinal Health (CAH), CVS and McKesson (MCK).
11/10/17
11/10/17
UPGRADE

On The Fly: Top five analyst upgrades
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. CVS Health (CVS) upgraded to Buy from Hold at Needham with analyst Kevin Caliendo saying the stock's risk/reward is favorable, especially if CVS is able to consummate the reported merger with Aetna (AET). 2. Kohl's (KSS) upgraded to Outperform from Neutral at Baird with analyst Mark Altschwager saying Kohl's improving product portfolio and strong loyalty position the company for the holiday season, while cost savings and inventory reductions provide free-cash-flow visibility near-term. 3. Fiat Chrysler (FCAU) upgraded to Neutral from Sell at Citi. 4. Comcast (CMCSA) upgraded to Action List Buy from Buy at TD Securities. 5. Hyatt (H) upgraded to Buy from Hold at Berenberg with analyst Stuart Gordon saying the potential returns from the company's real estate disposals are being underappreciated. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
WBA Walgreens Boots Alliance
$72.76

0.84 (1.17%)

11/27/17
LEER
11/27/17
NO CHANGE
Target $280
LEER
Outperform
Cigna most likely acquirer of Humana in any potential transaction, says Leerink
Leerink analyst Ana Gupte notes that a Change of Control 8-K filed by Humana (HUM) suggests that the company is a possible take-out target after the Medicare Advantage Annual Enrollment Season, though the company maintains that this is a needed refresh with broader policy guidelines, rather than individually driven. The analyst sees Cigna (CI) as the most likely acquirer in any potential transaction and able to offer as much as 6% accretion in year 2 and 12% in year 3 post close. However, Anthem (ANTM) and even Wal-Mart (WMT) or Walgreens Boots Alliance (WBA) could be other dark horse acquirers, she contends. Gupte expects that Cigna would need to divest its legacy Health Spring MA assets to satisfy anti-trust regulators, with multiple possible buyers for the assets including WellCare (WCG), Aetna (AET) and Anthem. The analyst reiterates an Outperform rating and $280 price target on Humana shares.
11/22/17
NEED
11/22/17
NO CHANGE
Target $86
NEED
Buy
Walgreens Boots Alliance price target lowered to $86 from $94 at Needham
Needham analyst Kevin Caliendo lowered his price target on Walgreens (WBA) to $86, reflecting risk-adjustment from the overhang related to Amazon's (AMZN) pending decision on entering the pharmacy business. The analyst keeps his Buy rating, saying investors may not appreciate the bounce in the company's U.S. retail margin driven in part by the growth of the beauty differentiation program rollout that is still in its early stages.
MCK McKesson

11/01/17
NEED
11/01/17
NO CHANGE
Target $173
NEED
Buy
McKesson price target lowered to $173 from $178 at Needham
Needham analyst Kevin Caliendo lowered his price target on McKesson (MCK) to $173 despite a solid quarter, saying the positive results were overshadowed by Amazon (AMZN) receiving wholesale pharmacy licenses in 12 states. The analyst notes a 15% reversal in the stock price from its post-earnings high, also attributing the price target drop to changing investor sentiment and a a lowered terminal growth rate of 1%.
11/09/17
FBCO
11/09/17
NO CHANGE
Target $130
FBCO
Underperform
McKesson price target lowered to $130 from $155 at Credit Suisse
Credit Suisse analyst Erin Wilson Wright lowered her price target for McKesson to $130 from $155 on seemingly sustained industry challenges, including lackluster script volume and drug pricing challenges. The analyst reiterates an Underperform rating on the shares.
CAH Cardinal Health

11/20/17
MSCO
11/20/17
DOWNGRADE
MSCO
Underweight
Cardinal Health downgraded to Underweight from Equal Weight at Morgan Stanley
11/20/17
11/20/17
DOWNGRADE
Target $51

Underweight
Cardinal Health cut to sell on outsized Amazon risk at Morgan Stanley
As previously reported, Morgan Stanley analyst Ricky Goldwasser downgraded Cardinal Health (CAH) to Underweight, the firm's equivalent to a sell rating, from Equal Weight. It has become clear that Amazon (AMZN) is looking to scale its medical supply distribution efforts and Cardinal's potential earnings risk from Amazon's effort is outsized compared to peers and still underappreciated, said Goldwasser, who added that "price competition is likely a matter of time" as Amazon builds its infrastructure. He cut his price target on Cardinal to $51 from $72.
ABC AmerisourceBergen

11/06/17
NEED
11/06/17
NO CHANGE
Target $86
NEED
Buy
AmerisourceBergen price target lowered to $86 from $93 at Needham
Needham analyst Kevin Caliendo lowered his price target on AmerisourceBergen (ABC) to $86 following Q4 results and initial FY18 guidance. Caliendo says he questions expectations of 3%-5% profit growth amid the management's expectations of increased operating spending. The analyst keeps his Buy rating however, noting that the set-up for FY18 is still appealing, once year-end selling is finished and Amazon's (AMZN) plans on pharmaceutical distribution are disclosed.
10/27/17
JEFF
10/27/17
NO CHANGE
JEFF
Amazon licenses likely related to medical equipment, says Jefferies
News of Amazon.com's (AMZN) receipt of wholesale pharmacy licenses drove a sell-off yesterday in pharma supply chain stocks, Jefferies analyst Brian Tanquilut tells investors in a research note. Shares of AmerisourceBergen (ABC), Cardinal Health (CAH) and McKesson (MCK) fell yesterday in late afternoon trading. The analyst says that while the news strengthened investor fears about Amazon's entry into drug retailing, his due diligence indicates the licenses Amazon obtained are likely associated with its sale and distribution of medical equipment rather than prescription drugs. Tanquilut, however, recognizes that Amazon fears will overhang over prescription supply chain stocks in the near-term. He believes the impact to distributors from Amazon's professional medical device sales and distribution business remains difficult to assess.

TODAY'S FREE FLY STORIES

MGPI

MGP Ingredients

$74.01

0.25 (0.34%)

13:13
12/12/17
12/12
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  • 14

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RIOT

Riot Blockchain

$23.08

7.22 (45.52%)

13:05
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Options
Riot Blockchain Inc call volume above normal and directionally bullish »

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TWTR

Twitter

$21.88

-0.175 (-0.79%)

13:03
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  • 23

    Jan

LLY

Eli Lilly

$86.39

-0.28 (-0.32%)

13:03
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Eli Lilly Canada announces approval of Entuzity KwikPen »

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  • 13

    Dec

  • 18

    Jan

  • 31

    Jan

FDC

First Data

$16.60

0.175 (1.07%)

13:02
12/12/17
12/12
13:02
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13:02
Conference/Events
First Data management to meet with Craig-Hallum »

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  • 13

    Dec

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  • 14

    Dec

WLL

Whiting Petroleum

$24.33

-1.2431 (-4.86%)

13:01
12/12/17
12/12
13:01
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13:01
Downgrade
Whiting Petroleum rating change  »

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12:55
12/12/17
12/12
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Conference/Events
FCC to ho ld a council meeting »

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RPD

Rapid7

$18.77

0.03 (0.16%)

12:55
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12/12
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Conference/Events
Rapid7 to host analyst day »

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  • 12

    Dec

EPAY

Bottomline Technologies

$33.86

0.08 (0.24%)

12:54
12/12/17
12/12
12:54
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Conference/Events
Bottomline Technologies management to meet with Craig-Hallum »

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  • 13

    Dec

SPX

S&P 500

, SPY

SPDR S&P 500 ETF Trust

$267.13

0.82 (0.31%)

12:51
12/12/17
12/12
12:51
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12:51
Hot Stocks
Senator Paul says tax cuts 'are never the problem' »

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SPX

S&P 500

SPY

SPDR S&P 500 ETF Trust

$267.13

0.82 (0.31%)

03/08/13
Wedge Partners
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12:50
12/12/17
12/12
12:50
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12:50
General news
Senator Rand Paul tweet »

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SPX

S&P 500

, SPY

SPDR S&P 500 ETF Trust

$266.94

0.63 (0.24%)

12:45
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12/12
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Hot Stocks
Senator Paul tweets opposition to bills that add to deficit »

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SPX

S&P 500

SPY

SPDR S&P 500 ETF Trust

$266.94

0.63 (0.24%)

03/08/13
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IBM

IBM

$157.33

1.92 (1.24%)

12:45
12/12/17
12/12
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Options
IBM call volume above normal and directionally bullish »

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  • 12

    Dec

12:35
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Treasury 30-year auction preview: the auction is likely to see average results »

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KMT

Kennametal

$47.39

1.43 (3.11%)

12:20
12/12/17
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Kennametal sees FY21 adjusted sales growing to $2.5B-$2.6B »

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  • 12

    Dec

KMX

CarMax

$67.59

-0.38 (-0.56%)

12:20
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Short-term put buying in Carmax »

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  • 21

    Dec

KMT

Kennametal

$47.38

1.415 (3.08%)

12:18
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  • 12

    Dec

$NSD

NASDAQ Market Internals

12:17
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$NYE

NYSE Market Internals

12:16
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NYSE market internals summary »

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FNF

FNF Group

$40.39

-0.24 (-0.59%)

12:15
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FNF Group management to meet with Piper Jaffray »

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  • 13

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VLKAY

Volkswagen

$40.48

0.38 (0.95%)

12:10
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12:10
Periodicals
VW-owned Scania appeals EUR880M EU fine over price fixing, Reuters reports »

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AKS

AK Steel

$5.37

-0.035 (-0.65%)

12:10
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Change of sentiment in AK Steel »

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