PSS World Medical Upgraded After October Slide
NEW YORK (AP) ¿ A Raymond James analyst upgraded shares of medical products distributor PSS World Medical Inc. Tuesday, saying a recent sell-off makes the stock more attractive.
John Ransom raised his rating on the stock to "Outperform" from "Market Perform," saying Wall Street's expectations for PSS World have become more realistic in recent weeks. He added that the company could surpass analyst estimates if its profit margins improve and the company takes advantage of its solid financial position.
The Jacksonville, Fla., company's shares have fallen 15 percent since reaching their highest closing price in 10 years on Oct. 19. Ransom said traders who were looking to make a quick profit off of PSS World's sales of swine flu products have now sold their shares, and he said the stock should outperform the market again.
In late October, PSS World reported $23 million in produce sales from swine flu in the fiscal second quarter. It then raised its profit estimate for the year, mostly due to sales of swine flu related products. But that has not staved off a decline in the shares.Ransom said PSS World could use its available cash and credit to make an acquisition or buy back stock, which could boost its results. After rising as much as 8.5 percent earlier in the trading day, PSS shares made a more modest gain of 32 cents, or less than 2 percent, to $19.67 in the afternoon.
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