Amerisource Bergen Corp.

Announcement: ABC 8-K Special Filing

Form 8-K - Current report - Item 1.01 Item 2.03 Item 9.01

Ann Hynes

According to a recent stock filing, Mizuho Securities analyst Ann Hynes has raised her price target for AmerisourceBergen (symbol ABC) from $166.87 to $174. The increase in price target is linked to the company's healthcare solutions trends and M&A prospects, which has resulted in potential upside scenarios.

AmerisourceBergen Stock Receives Price Target Increase due to Healthcare Solution Trends and M&A Opportunities

Part 1: Analysis of Performance

AMERISOURCEBERGEN CORP has reported a solid performance in the first half of the fiscal year ended September 30, 2023. The company's revenue increased by $5.7 billion or 9.9% from the prior year quarter, and $9.0 billion or 7.6% from the prior year six-month period due to growth in the U.S. Healthcare Solutions segment. The growth in revenue was due to increased sales of specialty products to physician practices and health systems, offset in part by a decrease in sales of COVID-19 treatments (primarily commercial treatments). Gross profit in the six-month period was also favorably impacted by an increase in gains from antitrust litigation settlements. However, the decreases were offset in part by last-in, first-out ("LIFO") expense in the current year periods in comparison to a LIFO credit in the prior year periods. The U.S. Healthcare Solutions segment grew its revenue by $5.8 billion or 11.3% from the prior quarter and $9.0 billion or 8.7% from the prior year six-month period due to overall market growth primarily driven by unit volume growth, including increased sales to its two largest customers.

The International Healthcare Solutions revenue decreased $12.8 million from the prior year quarter and $51.3 million from the prior year six-month period. The decrease was primarily due to the June 2022 divestiture of Brazil specialty business and a decrease in sales at Alliance Healthcare, the European distribution business. This decrease was also due to unfavorable foreign currency exchange rates in the current year periods in comparison to the prior year period.

Part 2: Forward-looking Analysis

AMERISOURCEBERGEN CORP or Cencora, as it's expected to be renamed in the second half of the calendar year 2023, has been actively pursuing mergers and acquisitions to expand and grow its business across the healthcare supply chain. Its recent acquisition of PharmaLex in January 2023 demonstrates the company's commitment to advancing its role as a partner of choice for biopharmaceutical partners across the pharmaceutical development and commercialization journey. Cencora's joint venture with TPG to acquire OneOncology, a network of leading oncology practices, is expected to close by the end of September 2023. This acquisition will add value to the company's product range and improve its competitive position as a provider of specialized services to manufacturers, providers, and pharmacies across the healthcare supply chain.

The current physician practice trends in the U.S., including consolidation and increased technology adoption, are favorable for the company's business operations. Cencora's demand-creating sales force services to biopharmaceutical manufacturers through its U.S. Healthcare Solutions Business should enable it to better respond to the increasing demand for integrated services.

In conclusion, Cencora has reported a solid performance in its first half of the fiscal year ended September 30, 2023. Its strategic acquisitions and joint ventures are focused on expanding the company's product range and improving its competitive position. The company's services to biopharmaceutical manufacturers through its U.S. Healthcare Solutions segment should enable it to respond better to the ongoing physician practice trends in the U.S. Healthcare market.

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing

AmerisourceBergen Stock Receives Price Target Increase due to Healthcare Solution Trends and M&A Opportunities

AmerisourceBergen Stock Receives Price Target Increase due to Healthcare Solution Trends and M&A Opportunities

Cencora Reports Strong H1 Performance and Strategic Growth Plans

Cencora Reports Strong H1 Performance and Strategic Growth Plans

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing

Announcement: ABC 8-K Special Filing