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AmerisourceBergen (ABC) Soars 3.5%: Is Further Upside Left in the Stock?

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AmerisourceBergen (ABC) shares soared 3.5% in the last trading session to close at $116.49. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.5% loss over the past four weeks.

AmerisourceBergen saw a strong price increase following the New York Attorney General Letitia James’ announcement of a $1.1 billion settlement agreement with three of the nation’s largest drug distributors. Interestingly, AmerisourceBergen is one these three companies. This in turn will help the New York State to fight the ongoing opioid epidemic.

This prescription drug distributor is expected to post quarterly earnings of $1.98 per share in its upcoming report, which represents a year-over-year change of +7%. Revenues are expected to be $51.47 billion, up 13.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For AmerisourceBergen, the consensus EPS estimate for the quarter has been revised 4.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ABC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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