SWS Cuts Accredo Health Outlook

After a strong second quarter, the provider of pharmacy services warned on fiscal 2003 earnings

SWS Securities cut its estimates and price target on Accredo Health (ACDO ).

Analyst Anne Barlow says Accredo's shares are trading sharply lower Monday due to concerns over its slightly revised revenue outlook for fiscal 2003 (June). Also, investors have concerns about the pricing for Synagis, a respiratory infection prevention treatment.

Barlow notes the company's gross margins were better than expected; she says other core product lines are growing at strong double-digits growth rates. She says Accredo still is projecting 25% to 40% growth in Synagis for fiscal 2003.

Barlow notes the company is a sector leader; top down fundamentals still are good with strong near-term catalysts. He trimmed the $1.38 fiscal 2003 earnings per share estimate to $1.36, and cut the $1.74 fiscal 2004 estimate to $1.72. She also cut her $48 target to $41, but is keeping her strong buy rating.

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