UPDATE: Cantor Fitzgerald Initiates Buy, $43 on Walgreen Post Express Scripts Contract Resolution
Cantor Fitzgerald initiated its coverage on Walgreen (NYSE: WAG) with a Buy rating and a price target of $43.
Cantor Fitzgerald noted, "We expect 50% recovery of the lost script volume by FY:13. The combination of synergies from Alliance Boots, impact from generics, contribution from the USA Drug acquisition, and the benefits of an aging store fleet should be accretive by close to $0.30 per share in FY:13. We prefer to be conservative in our assumptions for ESRX and assume that marketing expenses are likely to offset $0.11-$0.12 per share benefit from recaptured ESRX scripts in FY:13. If customer re-activation costs are lower than our expectations, or if Walgreen's is able to recapture a higher portion of ESRX customers relative to our assumption, we see potential for further upside.."
Walgreen closed at $35.44 on Tuesday.
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