) to buy from neutral, citing the company's quarterly results announcement last week.
Analyst Glenn Garmont said the company's third quarter results were better than he expected, which boosts his conviction in the company's fundamental outlook. He noted that third quarter earnings per share of 2 cents topped his estimates by a penny, amid revenue upside and higher gross margins. Notwithstanding a 17% rise in the stock since third quarter earnings per share came out Thursday, he finds the stock price valuation attractive. He also says the company is on track to achieve its 8 cents to 10 cents first quarter earnings per share guidance, paving the way to 40 cents in 2006. He sees 17 cents 2005 earnings per share. He views the company's 31 community pharmacies as an attractive "tuck-in" acquisition opportunity for a pharmacy benefit manager, retail pharmacy chain, or specialty pharmacy.