Healthcare Solutions Trends And M&A Prospects: AmerisourceBergen Gets A Price Target Hike Amid Upside Scenarios

  • Mizuho analyst Ann Hynes reiterated a Neutral rating on the shares of AmerisourceBergen Corporation ABCraising the price target to $174 from $170.
  • After delivering solid results in Q2, AmerisourceBergen raised revenue and adjusted operating income growth guidance.
  • For FY23, AmerisourceBergen expects adjusted EPS in the range of $11.70-$11.90, up from prior guidance of $11.50-$11.75
  • The analyst believes that the increased guidance was mainly driven by improving core U.S. Healthcare Solutions trends, a lower share count, and, importantly, updated FX, which is now expected to be a slight tailwind in the back half of FY2023.
  • While discussing upside scenarios, the analyst notes that future potential M&A opportunities create additional growth opportunities, driving better-than-expected earnings accretion.
  • These apart, incremental share repurchase or debt pay down can help AmerisourceBergen to diversify away from variable rate debt and lessen exposure to the rising interest rate environment.
  • Price Action: ABC shares are trading higher by 0.68% at $168.01 on the last check Wednesday.
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