Prepare Yourself for Liftoff: AmerisourceBergen Corporation (ABC)

AmerisourceBergen Corporation (NYSE: ABC) stock jumped 0.19% on Friday to $139.27 against a previous-day closing price of $139.00. With 1.58 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.47 million shares. During the session, the Medical Distribution company that operates in wider Healthcare sector, reached to the highest price of $146.40 whereas the lowest price it dropped to was $139.06. The 52-week range on ABC shows that it touched its highest point at $167.19 and its lowest point at $113.68 during that stretch. It currently has a 1-year price target of $170.67. With its current market cap of 29.00 billion, ABC has annualized dividend of $1.84 while the current yield stands at 1.32%. Beta for the stock currently stands at 0.48.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ABC was down-trending over the past week, with a drop of -4.33%, but this was down by -0.41% over a month. Three-month performance dropped to -11.17% while six-month performance rose 2.34%. The stock gained 10.93% in the past year, while it has gained 4.80% so far this year. A look at the trailing 12-month EPS for ABC yields 8.19 with Next year EPS estimates of 11.42. For the next quarter, that number is 2.56. This implies an EPS growth rate of 144.40% for this year and 4.44% for next year. EPS is expected to grow by 9.87% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 3.20%.

Float and Shares Shorts:

At present, 209.24 million ABC shares are outstanding with a float of 156.08 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.04 million, which was 1.93% higher than short shares on Jun 14, 2022. In addition to Mr. Steven H. Collis as the firm’s Chairman, Pres & CEO, Mr. James F. Cleary Jr. serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 67.66% of ABC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 40.79% of ABC, in contrast to 29.25% held by mutual funds. Shares owned by individuals account for 26.67%. As the largest shareholder in ABC with 8.51% of the stake, The Vanguard Group, Inc. holds 17,819,652 shares worth 17,819,652. A second-largest stockholder of ABC, BlackRock Fund Advisors, holds 8,005,538 shares, controlling over 3.82% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in ABC, holding 6,931,262 shares or 3.31% stake. With a 2.21% stake in ABC, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 4,630,015 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 1.73% of ABC stock, is the second-largest Mutual Fund holder. It holds 3,617,512 shares valued at 511.81 million. Vanguard 500 Index Fund holds 1.59% of the stake in ABC, owning 3,337,157 shares worth 472.14 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, ABC reported revenue of $57.72B and operating income of $856.55M. Over the past year, revenue came in at $229.67B while operating income stood at $2.61B. It generated $548.01M net income for the quarter, which came to $1.73B over the last twelve months. The EBITDA in the recently reported quarter was $1.04B and diluted EPS was $2.59. EBITDA for the full year was $3.83B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ABC since 16 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ABC analysts setting a high price target of $188.00 and a low target of $150.00, the average target price over the next 12 months is $171.23. Based on these targets, ABC could surge 34.99% to reach the target high and rise by 7.7% to reach the target low. Reaching the average price target will result in a growth of 22.95% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ABC will report FY 2022 earnings on 11/03/2022. Analysts have provided yearly estimates in a range of $11.10 being high and $10.84 being low. For ABC, this leads to a yearly average estimate of $10.96. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. AmerisourceBergen Corporation surprised analysts by $0.06 when it reported $2.62 EPS against a consensus estimate of $2.56. The surprise factor in the prior quarter was $0.30. Based on analyst estimates, the high estimate for the next quarter is $2.61 and the low estimate is $2.49. The average estimate for the next quarter is thus $2.56.

Summary of Insider Activity:

Insiders traded ABC stock several times over the past three months with 6 Buys and 7 Sells. In these transactions, 41,257 shares were bought while 6,046,094 shares were sold. The number of buy transactions has increased to 71 while that of sell transactions has risen to 56 over the past year. The total number of shares bought during that period was 699,204 while 6,613,327 shares were sold.

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