Banc of America Cuts Accredo Health Outlook

Analyst Robert Willoughby still keeps the buy rating on the stock

Banc of America cut its estimates on Accredo Health (ACDO ).

Analyst Robert Willoughby says while fourth-quarter earnings are in line, the $1.45 to $1.53 fiscal 2005 earnings per share estimate is below the previous forecast. He cut the fiscal 2005 (June) earnings per share estimate to $1.60 and cut the fiscal 2006 estimate to $1.80 on worse-than-expected government reimbursement levels and increased competition in key therapeutic franchises.

He also lowered the $34 target to $32. However, he believes the guidance reflects a worse-case reimbursement scenario. He thinks investors will regain confidence on addtional accretive acquisitions, new product indications, and a ramp-up of the Medco Health Solutions relationship over the course of fiscal 2005. He maintains the buy rating.

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