Leerink Partners Raises Price Target on AmerisourceBergen (ABC) to $100; Reiterates Outperform
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Leerink Partners reiterated an Outperform rating on AmerisourceBergen (NYSE: ABC), and raised the price target to $100.00 (from $91.00), after adjusting estimates. Leerink increased 2017 EPS estimates by $0.05 to $5.85, and reiterated its 2018 estimate of $7.00.
Analyst David Larsen commented, "We continue to be positive on shares of ABC. We believe that F2017E is a re-set year that takes into account (1) significant generic deflation after several years of good inflation and favorable Hep C trends, (2) F2017E accounts for large customer renewals that will pressure margins and (3) there will be incremental investments into the core infrastructure of ABC in F2017 which will likely put some incremental pressure on operating costs. While these headwinds are meaningful, we believe that they are fully reflected in the +4-6% y/y EPS growth guidance and consensus estimates. We believe that in F2018E ABC will benefit from an easier comparison, continued growth in specialty, and assuming the WBA/ RAD deal closes, ABC will likely win RAD from MCK. We maintain our OP and increase our PT to $100 (from $91)."
Shares of AmerisourceBergen closed at $85.51 yesterday.
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