< The 2015 All-America Research Team
Lisa Gill
J.P. Morgan
First-Place Appearances: 6
Total Appearances: 11
Analyst Debut: 2005
Lisa Gill retains the No. 1 position she has earned every year since 2010. The J.P. Morgan analyst “is a necessary contact for serious investors in the health care distribution space,” insists one avid fan. “Her knowledge of the company-specific details is matched by her understanding and critical eye of the strategic implications of company decisions. She has a depth of industry contacts and uses them when forming her opinions.” Shares of U.S. health care technology and distribution companies gained 7.3 percent over the 12 months through mid-September, beating the broad market by 9.9 percentage points. But performance within the group has varied by subsector, Gill notes, with drug retailers leading the pack. Her preferred name in that space is Woonsocket, Rhode Island’s CVS Health Corp., a favorite of long standing. “CVS is exceptionally well positioned to benefit from the underlying positive fundamentals across the [prescription] channel, such as an aging population, new drug development, managing specialty drug spend and increased utilization under the [Patient Protection and] Affordable Care Act,” explains the 46-year-old researcher. Further, she foresees additional opportunities from recent M&A activity. In June, CVS agreed to pay $1.9 billion for the pharmacy and clinics business of Minneapolis’s Target Corp.; and in August it closed its $12.7 billion purchase of Cincinnati-based Omnicare, a leading provider of pharmacy services to long-term care facilities. These moves will expand CVS’s reach with senior populations and increase its footprint, she believes. “CVS is a core hold,” Gill insists, and despite the stock’s recent gains, “we expect it to trade higher as the Omnicare and Target acquisitions are accretive to 2016 numbers.” He price objective for CVS, $116, implies a 17.1 percent upside to its value in mid-September. During the preceding 12 months, the shares climbed 23.6 percent, to $99.03, outperforming the sector by 16.3 percentage points.