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MCK

McKesson

$138.17

4.01 (2.99%)

, ABC

AmerisourceBergen

$83.18

1.6 (1.96%)

16:36
10/15/19
10/15
16:36
10/15/19
16:36

Drug distributors in talks over $18B opioid settlement, WSJ reports

McKesson (MCK), AmerisourceBergen (ABC), and Cardinal Health (CAH) are in talks to pay $18B to resolve sweeping litigation brought by state and local governments blaming the drug distributors for fueling the opioid crisis, possibly marking a broad end to lawsuits that have had a major impact on the pharmaceutical industry, the Wall Street Journal's Sara Randazzo reports, citing people familiar with the discussions. The three companies would collectively pay $18B over 18 years under the settlement deal currently on the table, Randazzo says, noting that Johnson & Johnson (JNJ) is also involved in the talks to contribute additional money. Reference Link

MCK

McKesson

$138.17

4.01 (2.99%)

ABC

AmerisourceBergen

$83.18

1.6 (1.96%)

CAH

Cardinal Health

$47.93

1.16 (2.48%)

JNJ

Johnson & Johnson

$132.84

2.17 (1.66%)

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    Oct

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    Nov

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    Nov

  • 07

    Nov

MCK McKesson
$138.17

4.01 (2.99%)

07/22/19
FBCO
07/22/19
INITIATION
Target $143
FBCO
Neutral
McKesson reinstated with a Neutral at Credit Suisse
Credit Suisse analyst Erin Wilson Wright reinstated coverage of McKesson with a Neutral rating and $143 price target. The analyst says her incrementally positive bias stems from evidence of stabilizing trends across the U.S. pharmaceutical supply chain, where she sees relief from easing generic deflation as well as enhanced visibility across branded price inflation and rebate paradigms. That said, with its shares up 26% from a low in March, Wright sees limited room for upside, acknowledging drug pricing scrutiny remains an overhang into an election cycle, along with other potential headwinds such as opioid litigation.
08/05/19
WOLF
08/05/19
DOWNGRADE
WOLF
Peer Perform
McKesson downgraded to Peer Perform from Outperform at Wolfe Research
Wolfe Research downgraded McKesson to Peer Perform from Outperform citing share outperformance.
08/06/19
CLVD
08/06/19
NO CHANGE
CLVD
Neutral
Cardinal Health recently lost 2 major accounts, says Cleveland Research
Cleveland Research analyst Rob Eich reports that his contacts indicate that Cardinal Health (CAH)recently lost two large specialty pharmacy contracts, including one to AmerisourceBergen (ABC) and one to McKesson (MCK). He estimates these contracts, which both should transition in about the first 6 months of FY20, represent $2B-$3B in annualized sales and are likely to be a drag on revenue growth of about 125-175 basis points, Eich told investors in a pre-open research note. He keeps a Neutral rating on Cardinal Health shares.
09/11/19
DBAB
09/11/19
INITIATION
Target $155
DBAB
Hold
McKesson initiated with a Hold at Deutsche Bank
Deutsche Bank analyst George Hill initiated McKesson with a Hold rating and a price target of $155 as part of a broader research note on Healthcare Technology & Services. The analyst is positive on the "structural position" of the wholesalers in the drug supply chain, but warns that the company is faced with issues related to brand drug pricing, generic drug pricing, its European business and domestic opioid litigation.
ABC AmerisourceBergen
$83.18

1.6 (1.96%)

09/11/19
DBAB
09/11/19
INITIATION
Target $91
DBAB
Hold
AmerisourceBergen initiated with a Hold at Deutsche Bank
Deutsche Bank analyst George Hill initiated AmerisourceBergen with a Hold rating and a price target of $91 as part of a broader research note on Healthcare Technology & Services. The analyst is positive on the "structural position" of the wholesalers in the drug supply chain, but warns that the company is faced with issues related to brand drug pricing, generic drug pricing, volumes shifting towards lower-margin customers and opioid litigation.
07/11/19
RAJA
07/11/19
NO CHANGE
RAJA
Death of drug rebate rule a win for PBMs and distributors, says Raymond James
After multiple media outlets, including Politico, reported that the Trump Administration has decided to withdraw the drug rebate rule, Raymond James analyst Chris Meekins called the news "a win" for pharmacy benefit managers and drug distributors and "a slight negative" for the pharmaceutical makers. The cost of the proposal to the government was ultimately too high with little guarantee that list prices would go down, said Meekins. However, President Trump hinted something "major" on drug pricing was coming over the next week during his kidney care speech and the analyst thinks the President is planning to move forward with an executive order on pricing. Publicly traded pharmaceutical distributors include McKesson (MCK), Cardinal Health (CAH), Amerisource (ABC) and Patterson (PDCO). Owners of pharmacy benefit managers include CVS Health (CVS), UnitedHealth (UNH), Anthem (ANTM) and Cigna (CI). Publicly traded large cap drugmakers include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).
05/14/19
RAJA
05/14/19
NO CHANGE
RAJA
Walgreens could target Amerisource, LabCorp if it seeks M&A, says Raymond James
Raymond James analyst John Ransom said he thinks that "the temptation" for Walgreens (WBA) to do "something" in terms of M&A will grow over time and the "something" it may consider could include either acquiring AmerisourceBergen (ABC) or LabCorp (LH). His analysis points to LabCorp being a less complicated, "but much less accretive," deal, said Ransom. Given Walgreens' existing ownership of about a 26% stake in AmerisourceBergen, he estimates 16% accretion from buying the company for $95 per share in cash if he assumes $500M of synergies and $2B of opioid fines financed with debt, the analyst tells investors. Though such a deal would make financial sense, he does not think investors would "be overly excited about the strategic upside," Ransom tells investors. While he argues that LabCorp "offers more strategic upside," such a hypothetical deal also has less financial benefit, according to Ransom.
CAH Cardinal Health
$47.93

1.16 (2.48%)

08/27/19
08/27/19
DOWNGRADE

Fly Intel: Top analyst downgrades
Catch up on today's top analyst downgrades with this list compiled by The Fly: 1. Cardinal Health (CAH) downgraded to Hold from Buy at Argus with analyst David Toung saying the margins of its Pharmaceutical Distribution segment remain under pressure entering FY20 after a 23bps contraction in FY19. 2. Red Robin (RRGB) downgraded to Underperform from Neutral at BofA/Merrill with analyst Gregory Francfort saying he believes the company's earnings growth will "materially miss" consensus expectations in 2020. 3. T-Mobile (TMUS) downgraded to Perform from Outperform at Oppenheimer. 4. Ultrapar (UGP) downgraded to Hold from Buy at Santander. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
09/11/19
DBAB
09/11/19
INITIATION
Target $50
DBAB
Hold
Cardinal Health initiated with a Hold at Deutsche Bank
Deutsche Bank analyst George Hill initiated Cardinal Health with a Hold rating and a price target of $50 as part of a broader research note on Healthcare Technology & Services. The analyst is positive on the "structural position" of the wholesalers in the drug supply chain, but warns that the company is faced with issues related to brand drug pricing, generic drug pricing, recent large customer repricings, and opioid litigation.
08/27/19
08/27/19
DOWNGRADE

Hold
Cardinal Health downgraded to Hold from Buy at Argus
As previously reported, Argus analyst David Toung downgraded Cardinal Health to Hold, saying the margins of its Pharmaceutical Distribution segment remain under pressure entering FY20 after a 23bps contraction in FY19. The analyst cites the management's expectations of margins in this segment declining by high single to low double digits this year because of the pricing of renewal contracts and higher legal expenses related to opioid litigation. Toung adds that he is also concerned with Cardinal Health's sluggish growth in the Medical segment because of the higher operating expenses coming from the integration of Cordis acquisition.
08/27/19
ARGS
08/27/19
DOWNGRADE
ARGS
Hold
Cardinal Health downgraded to Hold from Buy at Argus
JNJ Johnson & Johnson
$132.84

2.17 (1.66%)

10/11/19
BERN
10/11/19
UPGRADE
Target $155
BERN
Outperform
Bernstein upgrades 'historically cheap' Johnson & Johnson to Outperform
Bernstein analyst Lee Hambright upgraded Johnson & Johnson to Outperform from Market Perform with a price target of $155, up from $148. The shares in premarket trading are up $1.94, or 1.5%, to $131. The stock is "historically cheap," currently trading at a 17% discount to its sum-of-the-parts and a 13% discount to the S&P 500 Index, Hambright tells investors in a research note. The analyst, who believes J&J will resolve its legal liability for $10B-$12B, says the shares reflect a worst case scenario with $50B of liabilities being priced in. Following discussions with legal experts, Hambright has a "hard time seeing the worst-case scenarios playing out." The analyst estimates Johnson & Johnson faces about $5B of liability for opioids, another $5B for talc, and $800M for Risperdal.
10/11/19
BERN
10/11/19
UPGRADE
BERN
Outperform
Johnson & Johnson upgraded to Outperform from Market Perform at Bernstein
10/02/19
WELS
10/02/19
NO CHANGE
WELS
Outperform
J&J Ohio settlements suggest 'manageable' liability, says Wells Fargo
Wells Fargo analyst Larry Biegelsen notes that Johnson & Johnson has announced a settlement agreement with the Ohio counties of Cuyahoga and Summit that resolves all of the counties' claims with no admission of liability and removes the company from the federal trial scheduled to begin October 21, 2019 for a total of $20.4M. The analyst notes that after applying the total settlement amount to the populations of Cuyahoga and Summit counties and that to the total U.S. population of 327M, he arrives at a total settlement amount of $3.7B, which is well below his expected total settlement amount of $10B-$15B. Importantly, Biegelsen expects any settlement amount to be paid over a period of many years which will make the potential payments more manageable for Johnson & Johnson. He has an Outperform rating on the shares.
08/27/19
FBCO
08/27/19
NO CHANGE
Target $156
FBCO
Outperform
Opioid ruling reduces uncertainty, helps J&J move higher, says Credit Suisse
Credit Suisse analyst Matt Miksic notes that Johnson & Johnson appeared to react favorably to Oklahoma opioid ruling, due in part, to the $572M penalty being substantially lower than the $17B sought by State prosecutors. The analyst believes the decision helped reduce the range of uncertainty related to the potential opioid-related liability Johnson & Johnson could face, specifically in Oklahoma, if not across the U.S. more broadly. Miksic reiterates an Outperform rating and $156 target on the shares.

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AMRN

Amarin

$22.66

1.17 (5.44%)

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NCNA

NuCana

$5.59

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KZR

Kezar Life Sciences

$2.59

(0.00%)

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FSM

Fortuna Silver Mines

$3.01

-0.19 (-5.94%)

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  • 18

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LN

Line Corp.

$46.46

-4.13 (-8.16%)

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CANG

Cango

$5.83

-1.01 (-14.77%)

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BCH

Banco de Chile

$23.88

2.49 (11.64%)

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ITCB

Itau Corpbanca

$7.51

(0.00%)

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FTCH

Farfetch

$9.80

2.31 (30.84%)

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KRP

Kimbell Royalty Partners

$13.99

(0.00%)

09:58
11/15/19
11/15
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Conference/Events
Kimbell Royalty Partners management to meet with TD Securities »

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BANC

Banc of California

$14.75

(0.00%)

, FCBP

First Choice Bank

$22.50

(0.00%)

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BANC

Banc of California

$14.75

(0.00%)

FCBP

First Choice Bank

$22.50

(0.00%)

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AMAT

Applied Materials

$61.35

4.46 (7.84%)

, PCG

PG&E

$6.92

0.22 (3.28%)

09:55
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Early notable gainers among liquid option names on November 15th »

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AMAT

Applied Materials

$61.35

4.46 (7.84%)

PCG

PG&E

$6.92

0.22 (3.28%)

DHR

Danaher

$141.30

5.14 (3.78%)

LRCX

Lam Research

$281.95

7 (2.55%)

OXY

Occidental Petroleum

$39.06

1.3 (3.44%)

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  • 15

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EA

Electronic Arts

$99.12

1.58 (1.62%)

09:51
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  • 09

    Dec

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GDDY

GoDaddy

$68.00

0.22 (0.32%)

09:48
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  • 20

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BCH

Banco de Chile

$21.39

(0.00%)

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BSAC

Santander Chile

$24.53

2.37 (10.69%)

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FTCH

Farfetch

$9.97

2.48 (33.11%)

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EWW

iShares MSCI Mexico

$44.07

(0.00%)

, RH

RH

$175.19

(0.00%)

09:40
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EWW

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RH

RH

$175.19

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PDD

Pinduoduo

$41.29

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ORCL

Oracle

$56.10

(0.00%)

JCP

J.C. Penney

$1.10

(0.00%)

AMRN

Amarin

$21.49

(0.00%)

CSCO

Cisco

$44.92

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GRUB

GrubHub

$38.52

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QCOM

Qualcomm

$90.48

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BA

Boeing

$367.30

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