In a report published on Friday, Bank of America analyst Robert M. Willoughby raised the price target on Omnicare OCR from $47 to $54 and reiterated Buy rating.
In the report, Bank of America stated, "This morning, top OCR competitor PharMerica disclosed a significant customer, Kindred Healthcare, will not renew its contract associated with its skilled nursing facilities (SNFs) beyond December 31. The deal was worth about $211 million in revenues for PharMerica in 2012, although guidance was lower for 2013 based on scheduled SNF divestitures by Kindred...OCR confirmed it has won the business, which positions it well to win the hospital business for 2015. We are raising our 2014 EPS estimate to $3.90 (from $3.85), reflecting a conservative view of the gross profit opportunity."
Omnicare closed on Thursday at $46.69.
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