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After speaking with management teams of AmerisourceBergen (ABC) and Cardinal Health (CAH), Leerink analyst David Larsen said in a research note earlier today that he was surprised to hear Amazon (AMZN) "may indeed be in conversations with some middle-market PBMs now, in an effort to get into various contract arrangements." PBMs, or pharmacy benefit managers, include Express Scripts (ESRX) and UnitedHealth (UNH). Amazon likely has the ability to go after "cash paying" customers now, and while this segment of the market may be just 5%-10% of total, it can still be material, Larsen wrote. He points out that when Walgreens Boots Alliance (WBA) captured 40M prescriptions from CVS, or less than 2% of total PBM and retail scripts, the unfavorable earnings impact was significant. In order for Amazon to be licensed in 50 states, Leerink's specialist thinks it would take 18-24 months to get all of the paperwork completed. The specialist, however, believes there would be minimal impact from Amazon on the PBMs. After Axios highlighted Larsen's research note in an afternoon post on its website, shares of pharmacy owners CVS Health and Walgreens fell around 2%. Express Scripts is up 1% to $61.89 in afternoon trading.

Shares of toymakers, including Mattel (MAT) and Hasbro (HAS), are in focus on Tuesday morning following news that Toys"R"Us has filed for bankruptcy protection ahead of the critical holiday season. TOYS"R"US BANKRUPTCY: Toy retailer Toys"R"Us, which was acquired by private equity firms KKR (KKR) and Bain as well as real estate firm Vornado (VNO) over a decade ago and has struggled in recent years to compete with Amazon (AMZN) and Wal-Mart (WMT), officially filed for Chapter 11 bankruptcy on Monday night in federal court in Richmond, Virginia. The company said it has received a commitment for over $3B in debtor-in-possession financing from various lenders, including a JPMorgan (JPM)-led bank syndicate and certain of the company's existing lenders, which, subject to court approval, is expected to immediately improve the company's financial health and support its ongoing operations during the court-supervised process, the retailer said. Toys"R"Us said it is committed to working with its vendors "to help ensure that inventory levels are maintained and products continue to be delivered in a timely fashion." With its bankruptcy filing, Toys"R"Us becomes another casualty of the fast-changing retail industry, joining children's clothing retailer Gymboree and Payless ShoeSource. RETAILERS MOST EXPOSED: Jefferies analyst Stephanie Wissink noted earlier this month that the top three retailers most exposed to Toys"R"Us are Mattel, Hasbro and JAKKS Pacific (JAKK). Toys"R"Us made up 11%, 9%, 15%, of Hasbro, Mattel and JAKKS revenue in 2016, respectively, Wissink told clients. In a research note on Tuesday, Wissink said that the bankruptcy is "likely to create some dislocation among the vendor roster," and that companies like Hasbro and JAKKS are "strongly positioned" to maintain their financials and pursue brand consolidation opportunities. "We do not expect the bankruptcy event to trigger a domino effect in toy retail, implying massive discounting systemwide that pressures vendor margins on a sustained basis," Wissink added. TRU FILING 'POSITIVE' FOR AMAZON, WAL-MART: Separately, KeyBanc analyst Edward Yruma said this morning that the Toys"R"Us bankruptcy filing is likely to be "positive" for both Amazon and Wal-Mart, noting that baby and toy have been "strategic" categories for Amazon for years and that Wal-Mart should gain market share in the consolidating market. PRICE ACTION: In morning trading, shares of Mattel are up 0.13% to $15.07, JAKKS is up 2.65% to $2.90, and Hasbro is down 0.47% to $94.54.

Shares of Wal-Mart (WMT) are in focus in early trading after the big box retailer announced it will give its current employees the opportunity to work extra hours throughout the holiday season, bucking the trend of retailers hiring many season workers. WHAT'S NEW: Wal-Mart said on Wednesday that it will not hire thousands of seasonal workers for the upcoming critical holiday reason and will instead offer the additional hours to its current associates. "These extra hours will help staff traditional roles like cashier and stocker, and newly created technology-empowered positions such as personal shoppers and Pickup associates," Walmart U.S. Chief Operating Officer Judith McKenna said in a statement. "This is the same approach we took last year, and we heard great feedback from our customers and associates," McKenna added. McKenna also said that Wal-Mart will bring back the Holiday Helper program and will increase the number of Helpers it has in stores this season. The Helpers assist customers get through the stores faster by finding the shortest checkout line, opening registers as needed and grabbing items customers might have forgotten, the retailer noted. WHAT'S NOTABLE: Earlier this month, Target (TGT) said it would hire about 100,000 seasonal workers this year, a material increase from the 70,000 it hired last year prior to the holiday season. Target also said it will add 4,500 jobs at its distribution centers to fulfill online orders and replenish products at its brick and mortar stores throughout the season. Macy's (M) will increase by 20% the number of workers it hires during the holiday season to staff distribution and warehouses that support its online business, Reuters reported last week. The retailer plans to hire 18,000 holiday workers to fulfill online orders, according to the report. At the same time, Macy's total holiday hiring will fall from last year, with the retailer hiring roughly 80,000 seasonal workers, a decline from 83,000 last year. OTHERS TO WATCH: Other retailers are expected to soon announce their plans for seasonal hiring, including Kohl's (KSS) and J.C. Penney (JCP) and Amazon (AMZN). Last year, Amazon said it would hire more than 120,000 seasonal positions across its U.S. network, while J.C. Penney said it would bring on 40,000 seasonal workers. In 2016, Kohl's said it planned to add more than 69,000 seasonal workers. PRICE ACTION: Wal-Mart is fractionally lower in early trading at $80.04.