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As the pharmaceutical industry turns to automation, it’s a good time for investors to stock up on Omnicell shares, according to Bank of America. Analyst Alan Lutz initiated coverage for the medication management automation solutions provider with a buy rating and a $120 price target, saying in a note to clients on Friday that strong demand for Omnicell Software is on the way forward. “Our buy rating is driven by OMCL’s leadership position in the autonomous pharmacy market and its double-digit revenue growth and operating potential over the medium term,” he wrote. “We believe OMCL has a long runway for growth as the industry continues to move towards independent pharmacy.” Although Omnicell operates in a niche environment, Lutz sees growth opportunities in the company’s software as a service (SaaS) offerings and automated solutions. This includes a robot that helps hospitals cut back on full-time staff. “The business has steadily gained market share by expanding from a single point solution to a broad range of software and services aimed at streamlining workflows to support autonomous pharmacy,” said Lutz. “Our channel checks give us confidence that OMCL is an industry leader and can capitalize on additional pharmacy automation trends.” Lutz also said Omnicell is “strengthening its consolidation” by acquiring new companies that will help it expand into emerging and emerging markets. Omnicell’s shares are down 44 percent this year, but Bank of America’s fresh price target shows a nearly 18 percent upside as of Thursday’s close. — CNBC’s Michael Blue contributed reporting.
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