UPDATE: Bank of America Downgrades Walgreen's to Underperform

Bank of America has published a research report on Walgreen's

and has downgraded the company from Neutral to Underperform to reflect a more pessimistic view on the company. In the report, Bank of America writes, "WAG's high profile departure from Express Scripts' pharmacy network has been well-documented, with consensus and our EPS estimates falling on reduced volume assumptions. However, we are cutting our FY12 and FY13 EPS estimates to $2.60 and $2.80 (from $2.70 and $3.05) for Express' acquisition of Medco Health Solutions that we expect will close on March 31 and likely result in WAG's exclusion from the Medco pharmacy network 90 days later. Deteriorating volume metrics should hurt not only near term EPS, but longer term ROIC, which we now do not expect to improve until FY14." Bank of America has lowered the price objective from $33 to $26 on Walgreen's, which is currently trading down $0.34 from yesterday's $33.16 closing price.