Credit Suisse Downgrades Diplomat Pharmacy (DPLO) to Underperform on Slowing Organic Growth, Profit Challenges
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Credit Suisse downgraded Diplomat Pharmacy (NYSE: DPLO) from Neutral to Underperform with a price target of $13.00 (from $18.00) on continuing growth, profitability concerns.
Analyst Robert Willoughby commented, "We are incrementally negative on DPLO's slowing organic growth and profit challenges that exacerbate our concerns over its limited value proposition to health care payors. DPLO will not grow operating income in 2017, and while acquisitions may compensate for slowing growth, its invested capital base is ballooning. The 3Q16 guidance set removes some near term risk, but our conviction in our EPS estimates is lower, and a clear pathway to higher ROIC is still not apparent."
Shares of Diplomat Pharmacy closed at $14.46 yesterday.
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