Market News

CareRx Enters Deal With Rexall To Add 4,200 Beds

CareRx announced Monday it had signed an agreement to acquire a portion of the long-term care pharmacy business of Rexall Pharmacy Group. CareRx provides specialty pharmacy services to seniors communities. Rexall is one of the most trusted names in pharmacy.

This partial acquisition adds approximately 4,200 to the total number of residents served. CareRx (CRRX) now anticipates that it will serve more than 90,000 residents through the largest national eldercare pharmacy platform in Canada. The offer consists of C$3.5 million in cash and should close in June or July 2021. (See CareRx stock analysis on TipRanks)

CareRx President and CEO David Murphy said, “This acquisition will even further expand what is already the largest national platform in the seniors care pharmacy sector in Canada, and strengthen our ability to provide superior service to the growing number of Canadians living in seniors communities.”

In March, Canaccord Genuity analyst Tania Gonsalves reiterated a Buy rating on the stock. She also upped its price target to $C7.00 from C$6.50 (9.7% upside potential) following strong 4Q results.

Canaccord analysts Tania Gonsalves and Scott McFarland stated, “Considering the historically high number of contracts coming up for tender this year and the Ontario Ministry of Health’s recent decision to pause scheduled fee changes for one year, we continue to view CRRX’s growth prospects this year favorably.”

Overall, the consensus among Wall Street analysts is a Moderate Buy based on 2 Buys. The average analyst price target of C$7.00 implies a 9.7% upside potential to current levels. Shares have soared more than 70% year-to-date.

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