United Drug jumps 2.5% on ‘buy’ rating
In a detailed note on the Dublin-headquartered drug wholesaler and diversified healthcare services group, Merrion said the United stock “represents compelling value” and is surrounded by a number of potential catalysts for further upgrades through its next financial year up to September, 2010.
“Drivers behind potential upgrades include a recovery in the packaging division, wholesale market share gains in the Republic and swine flu-related volume increases in a number of businesses,” Merrion said in its note.
“Whilst the environment in the Republic’s wholesale market remains uncertain, competitor pressures may follow for market share gains; swine flu has the potential to drive increased market volumes through the winter and Boots – UD’s customer – will have benefited from the HSE-driven prescription crisis,” it added.
Last week, UD expanded its presence in the British pharmacy care market via a joint-venture with US company, Medco Health Solutions.
That tie-in – which will directly supply NHS customers with a suite of homecare services should contribute around £1.5m (€1.75m) in profit to UD’s full-year 2011 results, according to Merrion.
