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In a report published on Friday, Bank of America analyst Robert M. Willoughby lowered the price target on
PharMericaPMC from $18 to $17 and maintained a rating of Buy on the company.
In the report, Bank of America stated, "Kindred Healthcare will not renew its contract with PMC for skilled nursing facility (SNF) services, effective December 31, 2013. We estimate the relationship contributes about 10% of PMC's gross profit on an annualized basis, which suggests a hit of about $29 million in 2014. We are cutting our 2014 EPS estimate to $1.35 (from $1.50) on the lost contribution, which could be tempered by likely contributions during a 3-6 month transition period, the downsizing of its pharmacy footprint, and lower dedicated Kindred costs."
PharMerica closed on Thursday at $15.81.
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