Amerisource Stung by Cutback

In contrast, AmerisourceBergen has simply said that all of its branded business should be under fee contracts by the end of the year. Still, the company insisted on Monday that it is "tracking very consistently" with its peers.

The company went on to explain that its own year-end target will coincide with the launch of the Medicare Modernization Act. It is counting on that act, which promises prescription drug benefits to the senior population, for "incremental" sales increases next year.

Indeed, the company recently celebrated opportunities presented by the aging population as a whole.

"Father Time is our friend," Yost said during a UBS-sponsored conference last month. "The older people get, the more drugs they take; they more drugs they take, the older they get. It's really a wonderful thing."

Future Opportunities

Coldwell sees opportunities as well. To be sure, he acknowledges that AmerisourceBergen has struggled in recent months. Even before Monday's warning, he notes, the company found itself facing profit challenges as a result of major contract losses caused by "irrational industry pricing behavior."

Still, he says, the company may now enjoy more opportunities than others to expand its margins. In the meantime, he says, the company features unique characteristics that separate it from the pack. He points to the company's "near pure-play status" as a drug distributor and its "conservative management style" as particular examples.

Thus, he continues to maintain his outperform rating on the company despite its lower outlook.

"We are incrementally negative in the short term," Coldwell wrote, "but this event may provide an attractive buying opportunity for longer-term investors."

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