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AmerisourceBergen Corp ABC

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Morningstar’s Analysis

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AmerisourceBergen Posts Slowed Second-Quarter Revenue Growth but Exceeds Our Margin Estimates

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

We maintain our $135 fair value estimate on narrow-moat AmerisourceBergen Corp as second-quarter results supported our forecasts. Although revenue fell short of both our expectation and Factset consensus, gross margins exceeded our estimate. The pharmaceutical and distribution services segment underperformed with 3% sales growth year over year, despite solid performance of specialty products such as oncology supply and biosimilars. We interpret this lower growth as a natural correction following last year’s swell in drug volume across the pharmaceutical industry. Other revenue outperformed at 12% growth, which was credited to continued traction of the direct to patient business among manufacturers as well as the recent rise in pet ownership. Gross margins decreased by 4%, which we mainly attribute to generic pricing pressures. Adjusted operating expenses remained stable.

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Company Profile

Business Description

AmerisourceBergen is a leading global third-party logistics provider engaged in wholesale pharmaceutical sourcing and distribution of specialty, brand-name, and generic pharmaceuticals and related services to acute-care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, physician practices, dialysis clinics, and other healthcare customers. By acquiring smaller companies, management has attained the ability to transport biopharmaceuticals, distribute veterinary pharmaceuticals and vaccines, and provide inventory and reimbursement consulting services to providers.

1300 Morris Drive
Chesterbrook, PA, 19087-5594
T +1 610 727-7000
Sector Healthcare
Industry Medical Distribution
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 30, 2021
Stock Type Classic Growth
Employees 22,000