NEW YORK (TheStreet) -- Shares of AmerisourceBergen (ABC) - Get Report were plunging 12.54% to $69.54 on heavy trading volume early Friday afternoon after its competitor McKesson (MCK) slashed its fiscal 2017 outlook.
McKesson, which like AmerisourceBergern distributes pharmaceuticals, now expects to report adjusted earnings between $12.35 and $12.85 a share for fiscal 2017. The company had previously anticipated adjusted earnings between $13.43 and $13.93 per share for the year.
McKesson blamed the guidance cut partly on softer pricing trends, exacerbating concerns about drug makers and health care companies.
"In our first quarter, we witnessed some evidence of inflation and pricing softness in line with our original assumptions," McKesson CEO John Hammergren said on the earnings conference call. "However, this softness became much more pronounced in our second quarter, first around brand inflation and later, around customer pricing."
About 5.29 million shares of AmerisourceBergen have been traded so far today, well above the company's average trading volume of roughly 1.97 million shares a year.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
AmerisourceBergen's strengths such as its compelling growth in net income, revenue growth, notable return on equity and impressive record of earnings per share growth outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
You can view the full analysis from the report here: ABC
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.