J.P. Morgan Reiterates Overweight on Omnicare (OCR)

J.P. Morgan is out with a research report this morning, where it reiterates its Overweight rating on Omnicare inc.

; it has a $29.00 price target on the stock. The JPM analysts cited a recent meeting with company management, including Denny Shelton (interim CEO), John Workman (CFO), Tracy Finn (SVP, Strategic Planning & Development), Jeff Stamps (SVP, Pharmacy Operations), and Beth Kinerk (SVP, Sales and Customer Development). The analysts noted that, while nothing materially new came out of the meetings, management continued to point to a strong platform, which coupled with ongoing changes should lead to improved customer service, account retention, and new business trends, ultimately driving improved earnings growth. The JPM analysts noted that changing the company's culture remains priority one, with generics to be a key driver of earning growth. As for valuation, the analysts remarked, “In our view, OCR has a strong platform in a growing industry; the problems the company has faced appear fixable, although it could take some time. Shares currently trade at 10.3x our 2011 EPS estimate of $2.16, representing a 25% discount to the 5-year forward multiple of 13.8x.”