UPDATE: Bank of America Cuts PO to $47 on Cardinal Health Following Contract Loss

Bank of America maintained Cardinal Health

with a Buy rating and lowered the price target from $49.00 to $47.00. Bank of America analyst Robert M. Willoughby wrote, "CAH will lose its supply relationship with Walgreens, effective September 1, as indicated by the retailer's new 10-year agreement announced this morning. The contract was worth approximately $28 billion in annual revenues (~21% of CAH's FY12 sales), but at margins considerably below its corporate average (~9% of EBITDA). We are lowering our FY14 EPS estimate to $3.50 (from $3.95) on the lost business. Our P.O. moves to $47 (from $49), reflecting modestly improved multiples on our revised earnings expectations for the stronger implied dividend yield." Cardinal Health closed at $42.95 on Monday.