- RBC Capital Markets lowered the price target on Walgreens Boots Alliance Inc (NASDAQ:WBA) to $42 (10% upside) from $46 and maintained the Sector Perform rating.
- The analysts say that WBA posted solid fiscal 3Q22 results slightly ahead of their estimates and consensus on steady execution in the U.S. against a difficult comp and continued recovery in the international business.
- Related: Walgreens Posts Fall In Q3 Profit On Opioid Settlement, Lower Pharmacy Sales.
- "While we are somewhat disappointed by the abandonment of the Boots divestiture as a catalyst for incremental healthcare investments, we are encouraged by management's commitment to prioritizing Walgreens Health as a core long-term growth avenue," RBC wrote.
- Also Read: Walgreens Retains Boots Business Ownership Amid Market Instability
- Despite abandoning the Boots sale, the analysts write that the company remains on track with Walgreens Health investments, with solid pro forma growth momentum.
- Pro forma sales among VillageMD and Shields grew 65% in the quarter.
- RBC says that with a $31 million investment in organic growth during the quarter, the business can potentially generate sales of $2 billion in 2022, partially hampered by the delayed closing of the CareCentrix investment, expected by year-end.
- RBC lowered 2023 estimated earnings in anticipation of economic headwinds impacting the retail sector.
- Price Action: WBA shares are down 0.88% at $38.22 during the market session on the last check Tuesday.
- Photo Via Company
