Zacks Investment Research Lowers AmerisourceBergen (ABC) to Sell

Zacks Investment Research lowered shares of AmerisourceBergen (NYSE:ABC) from a hold rating to a sell rating in a research note issued to investors on Tuesday morning.

According to Zacks, “AmerisourceBergen’s dull performances in the PharMEDium and Lash unit have been a headwind in the last couple of quarters. Contraction in gross and operating margin in the last reported quarter raises concern. The company faces other headwinds like conversion of branded drugs and lower price generics. Cutthroat competition in the MedTech space adds to the woes. On the brighter side, the company continues to gain from, businesses like World Courier and Xcenda which have been raking in huge profits since quite some time. The company’s specialty distribution business also continues to contribute significantly to its topline. Additionally, AmerisourceBergen’s Global Commercialization Services and Animal Health unit saw a strong fourth quarter. A positive guidance for 2019 buoys optimism. AmerisourceBergen has outperformed the industry in a year’s time. “

Other equities research analysts have also recently issued reports about the company. Morgan Stanley lifted their target price on AmerisourceBergen from $88.00 to $91.00 and gave the company an equal weight rating in a research note on Monday, December 3rd. ValuEngine raised AmerisourceBergen from a sell rating to a hold rating in a research note on Wednesday, August 15th. Mizuho reissued a hold rating and issued a $90.00 target price on shares of AmerisourceBergen in a research note on Sunday, August 12th. Finally, Royal Bank of Canada lowered their target price on AmerisourceBergen from $90.00 to $87.00 and set a hold rating for the company in a research note on Friday, November 30th. One equities research analyst has rated the stock with a sell rating, seven have assigned a hold rating and eight have given a buy rating to the company’s stock. AmerisourceBergen presently has an average rating of Hold and an average target price of $101.36.

NYSE ABC opened at $84.32 on Tuesday. The firm has a market capitalization of $18.22 billion, a PE ratio of 12.99, a PEG ratio of 1.37 and a beta of 0.94. AmerisourceBergen has a 52 week low of $77.28 and a 52 week high of $106.27. The company has a quick ratio of 0.50, a current ratio of 0.93 and a debt-to-equity ratio of 1.48.

AmerisourceBergen (NYSE:ABC) last released its earnings results on Tuesday, November 6th. The company reported $1.45 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $1.44 by $0.01. The company had revenue of $43.30 billion during the quarter, compared to analysts’ expectations of $43.27 billion. AmerisourceBergen had a return on equity of 45.54% and a net margin of 0.99%. The business’s revenue for the quarter was up 10.7% on a year-over-year basis. During the same period last year, the firm earned $1.33 EPS. As a group, equities research analysts expect that AmerisourceBergen will post 6.81 EPS for the current year.

The business also recently disclosed a quarterly dividend, which was paid on Monday, December 3rd. Investors of record on Monday, November 19th were paid a dividend of $0.40 per share. The ex-dividend date was Friday, November 16th. This is a boost from AmerisourceBergen’s previous quarterly dividend of $0.38. This represents a $1.60 dividend on an annualized basis and a dividend yield of 1.90%. AmerisourceBergen’s payout ratio is 24.65%.

In related news, EVP Kathy H. Gaddes sold 2,652 shares of AmerisourceBergen stock in a transaction on Thursday, September 20th. The stock was sold at an average price of $89.79, for a total transaction of $238,123.08. Following the completion of the sale, the executive vice president now directly owns 3,891 shares of the company’s stock, valued at $349,372.89. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, Chairman Steven H. Collis sold 21,350 shares of AmerisourceBergen stock in a transaction on Monday, December 3rd. The stock was sold at an average price of $88.92, for a total value of $1,898,442.00. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 142,753 shares of company stock valued at $12,826,784. 27.30% of the stock is owned by insiders.

Several institutional investors have recently made changes to their positions in ABC. Baupost Group LLC MA grew its stake in shares of AmerisourceBergen by 46.8% during the third quarter. Baupost Group LLC MA now owns 2,751,056 shares of the company’s stock worth $253,702,000 after purchasing an additional 877,491 shares during the period. Equity Investment Corp acquired a new position in AmerisourceBergen in the third quarter valued at about $69,621,000. Millennium Management LLC grew its stake in AmerisourceBergen by 183.5% in the second quarter. Millennium Management LLC now owns 1,145,365 shares of the company’s stock valued at $97,665,000 after acquiring an additional 741,391 shares during the period. Mainstay Capital Management LLC ADV grew its stake in AmerisourceBergen by 6,233.3% in the second quarter. Mainstay Capital Management LLC ADV now owns 609,010 shares of the company’s stock valued at $7,469,000 after acquiring an additional 599,394 shares during the period. Finally, BlackRock Inc. grew its stake in AmerisourceBergen by 4.6% in the second quarter. BlackRock Inc. now owns 12,776,453 shares of the company’s stock valued at $1,089,447,000 after acquiring an additional 557,312 shares during the period. 64.58% of the stock is owned by institutional investors and hedge funds.

About AmerisourceBergen

AmerisourceBergen Corporation sources and distributes pharmaceutical products in the United States and internationally. Its Pharmaceutical Distribution segment distributes brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, outsourced compounded sterile preparations, and related services to various healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and other alternate site pharmacies, and other customers.

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