UPDATE: Citigroup Downgrades Walgreen to Sell

Citigroup lowers its rating on Walgreen WAG to Sell from Neutral following a proprietary survey of top Benefits Managers and lowers its price target to $28 from $35 a share to reflect a new valuation multiple of 11x vs 13x previously. Citigroup notes, "The results of our survey indicate that our estimate revisions are warranted as 1) a resolution is unlikely between WAG and ESRX in 2012; 2) the company has limited negotiating leverage; and 3) WAG's direct rates remain higher than employers' current PBM rates. Our survey leaves us concerned with WAG's ability to retain 25% of ESRX scripts in F2012 (vs. approx. 14.5% retention to date)." WAG closed at $34.28 a share on Monday.