AmerisourceBergen initiated with a Buy at Citi

Citi analyst Daniel Grosslight initiated coverage of AmerisourceBergen with a Buy rating and $185 price target. The analyst started the drug distribution sector with a positive bias, naming McKesson its top pick and AmerisourceBergen a "close second." The firm views the sector as safe haven in the currently challenged macro environment, with "unrivaled" cash generation and return on invested capital profiles. The big three distributors should be able to offset headwinds from generic price deflation and waning pandemic tailwinds to deliver high single-digit to low double-digit EBIT, contends Citi.