We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain AmerisourceBergen (ABC) Now
Read MoreHide Full Article
AmerisourceBergen Corporation is well-poised for growth on the back of its robust pharmaceutical distribution business and new product offerings. Intense competition remains a concern.
The stock has gained 15.5%, compared with the industry’s growth of 3.6% on a year-to-date basis. Meanwhile, the S&P 500 Index rallied 5.3% in the same time frame.
AmerisourceBergen — with a market capitalization of $23.11 billion — is one of the world’s largest pharmaceutical services companies, which is focused on providing drug distribution and related services to reduce health care costs and improve patient outcomes. It anticipates earnings to improve 11.4% over the next five years. Further, the company beat estimates in each of the trailing four quarters, the average surprise being 8.9%.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
What’s Deterring the Stock?
AmerisourceBergen operates in a highly competitive pharmaceutical distribution and related health care services market. The company’s primary competitors include Cardinal Health, McKesson, and national generic distributors and regional distributors. Consequently, increased competition can impact the company’s business.
What’s Driving Growth?
Pharmaceutical Distribution serves healthcare providers in the pharmaceutical supply channel. AmerisourceBergen has been witnessing strong revenue growth in this unit in the last couple of quarters. Increasing volume and an expanding customer base have been driving the segment. Strong organic growth rates in the U.S. pharmaceutical market, improving patient access to medical care, enhanced economic conditions and population demographics are likely to continue benefiting the segment in the quarters ahead.
In fiscal first-quarter 2021, revenues segment totaled $50.49 billion, reflecting an increase of 9.7% on a year-over-year basis on the back of higher volume related to growth of some of its largest customers and continued strength in specialty product sales. Segmental operating income was $496.1 million, up 26.6% year over year. Increase in gross profit resulting from revenue growth contributed to the upside.
AmerisourceBergen is expected to gain from generics growth in the long run. The company is well-positioned to help ensure products get to market as efficiently as possible. During third-quarter fiscal 2020, AmerisourceBergen introduced two new offerings at its MWI Animal Health business, which have been developed to help veterinarians manage the financial impact of COVID-19.
The new offerings enable practices to offer flexible financing solutions for clients, thereby lowering the financial burden of both routine and emergency pet care. The offerings also help practices in achieving sustained revenue growth, long-term client engagement and improved patient outcomes.
Which Way are Estimates Headed?
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $204.42 billion, indicating an improvement of 7.7% from the prior year. The same for adjusted earnings per share stands at $8.51, suggesting growth of 7.7% from the year earlier.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is estimated at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Here's Why You Should Retain AmerisourceBergen (ABC) Now
AmerisourceBergen Corporation is well-poised for growth on the back of its robust pharmaceutical distribution business and new product offerings. Intense competition remains a concern.
The stock has gained 15.5%, compared with the industry’s growth of 3.6% on a year-to-date basis. Meanwhile, the S&P 500 Index rallied 5.3% in the same time frame.
AmerisourceBergen — with a market capitalization of $23.11 billion — is one of the world’s largest pharmaceutical services companies, which is focused on providing drug distribution and related services to reduce health care costs and improve patient outcomes. It anticipates earnings to improve 11.4% over the next five years. Further, the company beat estimates in each of the trailing four quarters, the average surprise being 8.9%.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
What’s Deterring the Stock?
AmerisourceBergen operates in a highly competitive pharmaceutical distribution and related health care services market. The company’s primary competitors include Cardinal Health, McKesson, and national generic distributors and regional distributors. Consequently, increased competition can impact the company’s business.
What’s Driving Growth?
Pharmaceutical Distribution serves healthcare providers in the pharmaceutical supply channel. AmerisourceBergen has been witnessing strong revenue growth in this unit in the last couple of quarters. Increasing volume and an expanding customer base have been driving the segment. Strong organic growth rates in the U.S. pharmaceutical market, improving patient access to medical care, enhanced economic conditions and population demographics are likely to continue benefiting the segment in the quarters ahead.
In fiscal first-quarter 2021, revenues segment totaled $50.49 billion, reflecting an increase of 9.7% on a year-over-year basis on the back of higher volume related to growth of some of its largest customers and continued strength in specialty product sales. Segmental operating income was $496.1 million, up 26.6% year over year. Increase in gross profit resulting from revenue growth contributed to the upside.
AmerisourceBergen is expected to gain from generics growth in the long run. The company is well-positioned to help ensure products get to market as efficiently as possible. During third-quarter fiscal 2020, AmerisourceBergen introduced two new offerings at its MWI Animal Health business, which have been developed to help veterinarians manage the financial impact of COVID-19.
The new offerings enable practices to offer flexible financing solutions for clients, thereby lowering the financial burden of both routine and emergency pet care. The offerings also help practices in achieving sustained revenue growth, long-term client engagement and improved patient outcomes.
Which Way are Estimates Headed?
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $204.42 billion, indicating an improvement of 7.7% from the prior year. The same for adjusted earnings per share stands at $8.51, suggesting growth of 7.7% from the year earlier.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Hologic, Inc. (HOLX - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Abbott Laboratories (ABT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is estimated at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>