CS First Boston raised the target and reiterates buy on AmeriSource Health (AAS).
Analyst Robert Willoughby says the salesforce merger combines the third and fourth largest wholesale drug distributors to form the largest distributor. He thinks the deal will be accretive to AmeriSource's EPS in fiscal 2002 (Sept.) and fiscal 2003. He also believes management's target of 20% EPS growth rate is realistic. He notes management expects to capture $125 million in cost savings, and thinks management will be able to pull in at least $200 million in capital over the next three years.
Willoughby sees $2.29 fiscal 2001 EPS, and raised the $2.75 fiscal 2002 EPS to $2.85. He also raised the $61 target to $70.