* ESRX 90-98-97 beats by $0.10; raises FY07 guidance (88.90 +0.09) : Reports Q1 (Mar) earnings of $1.04 per share, excluding non-recurring items, $0.10 better than the Reuters Estimates consensus of $0.94; revenues rose 3.6% year/year to $4.54 bln vs the $4.52 bln consensus. Co raises FY07 (Dec) guidance, sees EPS of 4.29-4.41 vs. $4.22 consensus. The co is also increasing its guidance on cash flow from operations in 2007 to $750-850 mln from a range of $700-800 mln. In assessing the risks and opportunities inherent in its forecast, the co believes there is a potential upside of $0.14 to $0.16 per diluted share to the above earnings guidance range. The biggest item providing this upside would be the reduction of the allowance for the potential impact of the AWP settlement. This potential upside of $0.14 to $0.16 per diluted share would be realized in the second half of 2007, with the majority occurring in the fourth quarter.
Express Scripts: Color on quarter (88.90 ) : Jefferies raises their ESRX tgt to $114 from $102, saying strong Q1 results and improved FY07 earnings outlook underscore both the strong fundamentals underlying the PBM sector and mgmt's success at driving shareholder value... Wachovia notes that ESRX reported very strong Q1 results and raised guidance, with the potential for further upside in 2007. They note that as expected, ESRX announced a $1 bln share buyback, upsized from the prior $500 mln. Firm expects multiple expansion driven by strong secular trends, the share buyback and further upward revisions of 2007E EPS.
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