UPDATE: Gabelli & Company Downgrades Owens & Minor to Hold
Gabelli & Company lowers its price target on Owens & Minor (NYSE: OC) from Buy to Hold following Q4 results, as it is unclear the company will match historical growth rate in 2013.
Gabelli & Company comments, "Revenue up 6% to $2.2 billion, benefiting from an extremely large customer conversion during the quarter. 2.5% operating margin was down 29bps as lower supplier incentives the mix shift towards larger, lower margin IDN's impacted gross margins. Large IDN customers continue to drive strong revenue growth, but it is taking longer than expected to reach target profitability. ... 2012 will see modest improvement for OMI but it is unclear if 2013 will see a return to historical earnings growth, given the margin pressure from GPO contract renewals and the continued growth of IDN's."
OMI closed at $30.02 a share yesterday.
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