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 ABC, raising 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.