Walgreens Boots Alliance-for risky Traders
2022.11.22 12:14
Walgreens Boots Alliance-for risky Traders
Budrigannews.com – Cowen raised the stock price of Walgreens Boots Alliance (NASDAQ:)in a research note on Tuesday, it upgraded the stock to Outperform from Market Perform, raising its price target for the stock from $43 to $54.
Investors were informed by Cowen analysts that WBA’s “transformation into a healthcare services business accelerates and op inc mix shifts away from US retail” presented an appealing risk-reward profile for the stock.
“We believe this is not a consensus call because the market has primarily focused on WBA’s retail exposure to an uncertain macro environment, with only one buy rating out of 18 ratings as of today.”Nevertheless, whereas 80% of adj.”We expect that by FY25, op income from US retail (ex-ABC earnings) will fall to 66% and continue to fall as WBA’s US Healthcare segment becomes the main growth driver for WBA,” the analysts wrote.
They went on to say that “execution remains a risk, particularly given the macro environment,” but that the risk is already discounted in the company’s current valuation.
“We believe investors should take the risk, given near-term support from 4.8% dividend yield,” the analysts added. “We view the risk/reward as very attractive.”The expansion of WBA’s US Healthcare segment, which was introduced a year ago, is crucial to our positive thesis.WBA is implementing its strategy with investments in VillageMD, Shields Pharmacy, the acquisition of CareCentrix, and the VillageMD/Summit Health-CityMD merger.
We are encouraged by FY25 revenue targets of $14.5 billion to 16.0 billion dollars, up from $9 billion to 10 billion dollars a year ago, and expectations of adj.”
“Potential upside to Rx trends in F2H23 from both improved staffing but also from Rx’s referred from Summit Health, which isn’t in guidance,” according to Cowen, also includes WBA’s performance in US retail.They also believe that “what could have been a looming overhang” will be removed by the “tentative opioid settlement” in the US Retail Pharmacy industry.
