UPDATE: Goldman Sachs Upgrades Owens & Minor to Neutral, Maintains $28 PT

Goldman Sachs raises its rating on Owens & Minor

to Neutral from Sell and maintains its $28 target price on a more balanced risk/reward profile. Goldman Sachs says, "We believe shares more appropriately reflect (1) prolonged weakness in hospital utilization/procedural volumes and (2) customer consolidation where IDNs are becoming stronger, more centralized customers. While we see stagnant volumes hampering the company's ability to grow the top line, we see OMI as having significant runway to prop margins with private label – OMI has historically been less aggressive with this important lever for margin expansion. On industry consolidation, although stronger customers shift leverage away from OMI, we believe the company is better positioned than its pure-play ambulatory counterparts and seems focused on aligning its growth initiatives with its customers." OMI closed at $$27.73 per share on Tuesday.