Analyst Michael Cherny of Leerink Partners reiterated a Hold rating on Walgreens Boots Alliance (WBA – Research Report), retaining the price target of $11.50.
Michael Cherny has given his Hold rating due to a combination of factors surrounding Walgreens Boots Alliance’s recent performance and strategic developments. The company’s pharmacy segment showed solid growth, particularly in the back of the store, with an increase in comparable prescriptions. However, the front of the store faced challenges, notably a decline in sales of discretionary items, which impacted overall retail sales.
Additionally, while international operations showed positive momentum, particularly in Boots and Germany, these were offset by increased investments in technology and payroll. The US Healthcare segment’s profitability improved, driven by contributions from VillageMD and Shields. Despite these mixed results, the pending acquisition by Sycamore adds uncertainty, leading to the withdrawal of guidance and no conference call, which supports the Hold rating and a price target of $11.50.
WBA’s price has also changed moderately for the past six months – from $9.080 to $10.590, which is a 16.63% increase.