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) Stock
Read MoreHide Full Article
AmerisourceBergen Corporation is well-poised for growth on the back of its robust U.S. Healthcare Solutions business and product launches. Intense competition remains a concern.
Shares of the Zacks Rank #3 (Hold) company have gained 33.7% compared with the industry’s growth of 9.6% in a year’s time. The S&P 500 Index has rallied 11.8% in the same time frame.
AmerisourceBergen — with a market capitalization of $32.73 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 by 8.2% over the next five years. The company beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 2.3%.
What’s Driving Growth?
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure to represent its expanded international presence owing to the June 2021 buyout of Alliance Healthcare. Consequently, starting from the first quarter of fiscal 2022, the company has realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
Per the segment realignment, U.S. Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group and ICS 3PL. The segment benefits from increasing volume and an expanding customer base. 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 favor the segment in the quarters to come.
Image Source: Zacks Investment Research
In first-quarter fiscal 2022, revenues at this segment totaled $52.98 billion, reflecting a rise of 2.7% on a year-over-year basis courtesy of an increase in specialty product sales coupled with overall market growth and strength in MWI Animal Health business. Lower revenues from COVID-19 therapies partially offset the upside. Segmental operating income was $569.1 million, up 0.6% year over year. Higher gross profit contributed to the rise.
In January 2022, the company collaborated with TrakCel — the leading innovator of cellular orchestration solutions — to launch an integrated technology platform developed to speed up patient access to prescribed cell and gene therapies and provide complete visibility throughout the treatment journey.
In November 2021, the company announced that it would be offering Prime Therapeutics’ IntegratedRx - Oncology program to eligible hospitals, health systems and independent oncology practice customers. On the back of medically-integrated networks of independent oncology practices or hospitals and health systems, IntegratedRx - Oncology drives lower costs, quicker time-to-medication, better adherence and an enhanced patient and provider experience for Blue Plans and their members.
In October, the company introduced universal radio-frequency identification — tagging and mobile application for its acute care medication tray solution to accelerate inventory management technologies for acute care settings throughout the United States.
What’s Hurting the Stock?
AmerisourceBergen operates in a highly competitive pharmaceutical distribution and related health care services market. The generic industry is facing consolidation of customers and manufacturers, globalization and increasing quality and regulatory challenges. The company encounters additional competition from manufacturers, chain drugstores, specialty distributors and packaging and health care technology companies. Increased competition will impact the company’s business.
Estimate Trend
AmerisourceBergen has been witnessing an upward estimate revision trend for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 0.9% to $10.79. The Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $57.31 billion, suggesting growth of 16.6% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 8.8% compares favorably with the industry’s 0.3%.
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #2 (Buy).
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.
McKesson surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20.6%. The company currently carries a Zacks Rank #2.
McKesson’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 8.8% compares favorably with the industry’s 4.1%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Retain AmerisourceBergen (ABC) Stock
AmerisourceBergen Corporation is well-poised for growth on the back of its robust U.S. Healthcare Solutions business and product launches. Intense competition remains a concern.
Shares of the Zacks Rank #3 (Hold) company have gained 33.7% compared with the industry’s growth of 9.6% in a year’s time. The S&P 500 Index has rallied 11.8% in the same time frame.
AmerisourceBergen — with a market capitalization of $32.73 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 by 8.2% over the next five years. The company beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 2.3%.
What’s Driving Growth?
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure to represent its expanded international presence owing to the June 2021 buyout of Alliance Healthcare. Consequently, starting from the first quarter of fiscal 2022, the company has realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
Per the segment realignment, U.S. Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group and ICS 3PL. The segment benefits from increasing volume and an expanding customer base. 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 favor the segment in the quarters to come.
Image Source: Zacks Investment Research
In first-quarter fiscal 2022, revenues at this segment totaled $52.98 billion, reflecting a rise of 2.7% on a year-over-year basis courtesy of an increase in specialty product sales coupled with overall market growth and strength in MWI Animal Health business. Lower revenues from COVID-19 therapies partially offset the upside. Segmental operating income was $569.1 million, up 0.6% year over year. Higher gross profit contributed to the rise.
In January 2022, the company collaborated with TrakCel — the leading innovator of cellular orchestration solutions — to launch an integrated technology platform developed to speed up patient access to prescribed cell and gene therapies and provide complete visibility throughout the treatment journey.
In November 2021, the company announced that it would be offering Prime Therapeutics’ IntegratedRx - Oncology program to eligible hospitals, health systems and independent oncology practice customers. On the back of medically-integrated networks of independent oncology practices or hospitals and health systems, IntegratedRx - Oncology drives lower costs, quicker time-to-medication, better adherence and an enhanced patient and provider experience for Blue Plans and their members.
In October, the company introduced universal radio-frequency identification — tagging and mobile application for its acute care medication tray solution to accelerate inventory management technologies for acute care settings throughout the United States.
What’s Hurting the Stock?
AmerisourceBergen operates in a highly competitive pharmaceutical distribution and related health care services market. The generic industry is facing consolidation of customers and manufacturers, globalization and increasing quality and regulatory challenges. The company encounters additional competition from manufacturers, chain drugstores, specialty distributors and packaging and health care technology companies. Increased competition will impact the company’s business.
Estimate Trend
AmerisourceBergen has been witnessing an upward estimate revision trend for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 0.9% to $10.79.
The Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $57.31 billion, suggesting growth of 16.6% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 8.8% compares favorably with the industry’s 0.3%.
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #2 (Buy).
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.
McKesson surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20.6%. The company currently carries a Zacks Rank #2.
McKesson’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 8.8% compares favorably with the industry’s 4.1%.