Bank of America Comments on Walgreen Acquisition Announcement

Bank of America Merrill Lynch provided color on Walgreen's

of USA Drug Pharmacy in a research report published today. Bank of America Merrill Lynch has an Underperform rating and $26 price target on the company. In the report, Bank of America Merrill Lynch stated, "The strategy strikes us as part of a concerted effort by WAG to compensate for a failing PBM strategy." Later in the report, Bank of America Merill Lynch noted, "While not on the scale of the recently announced Alliance Boots mega-deal, it is consistent with WAG's effort to spend its way out of lost pharmacy business rather than resolving its issues with Express Scripts. However, it is less clear to us that WAG can acquire enough scale to offset share losses expected with the growing acceptance of tiered pharmacy networks in the coming quarters." Shares of Walgreen were trading at $29.54 at the time of posting, down 0.24% from Tuesday's market close.