Owens & Minor Reports Optimistic Revenue Guidance

Goldman Sachs has published a research report on Owens & Minor, Inc. OMI after Goldman attended the company's Investor Day in New York. In the report, Goldman writes "While management believes that utilization in 2011 will be generally in-line with 2010 levels, revenue guidance is for 3%-5% growth which is expected to be primarily driven from net new business. While we agree with management's conservative position on utilization, we believe the top-line growth goal to be a bit aggressive in the current environment. The day's other key topic was OM HCL, the company's third party logistics business, which has received increased focus following the October 25 announcement of a 5-year supply chain services agreement with medical device manufacturer CareFusion. Although we believe the deal validates management's efforts to further penetrate the 3PL opportunity (estimated at $44 billion), the overall breakeven for this business is now not expected for 18 months. We maintain our Sell rating and 12-month $25 price target, while lowering our 2011-2012 EPS to $2.00 and $2.16 from $2.05 and $2.18." Goldman maintains its Sell rating and $25 price target. Owens & Minor closed yesterday at $29.03.