Leerink Partners Downgrades AmerisourceBergen (ABC) to Market Perform on Deteriorating Fundamentals
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Leerink Partners downgraded AmerisourceBergen (NYSE: ABC) from Outperform to Market Perform with a price target of $75.00 (from $100.00) citing deteriorating fundamentals.
Analyst David Larsen commented, "We are downgrading shares of ABC to Market Perform. Following the quarter, and after working through our model, we believe that there will continue to be significant risk to earnings as we progress into 2017. On the call management indicated that generic deflation is trending above 9% (vs. guidance of 7-9%), it's very possible the RAD deal won't close, and industry headwinds put back-half loaded earnings at greater risk. We believe that ABC will continue to face headwinds from (1) brand and generic pricing (2) lower contribution from new generic launches, (3) heightened competition from peers due to pricing issues, (4) greater oversight from Washington including the potential negative impact from the Part B rule and (5) volume comps may be challenging since the market has largely lapped expanded coverage. We downgrade shares of ABC to MP on deteriorating fundamentals."
Shares of AmerisourceBergen closed at $72.32 yesterday.
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