UPDATE: J.P. Morgan Raises PT on Walgreens from $35 to $37

J.P. Morgan maintained a Neutral rating on Walgreens

and raised its price target from $35 to $37. J.P. Morgan remarked, “WAG shares traded sharply higher yesterday on the announcement of a new pharmacy network agreement with ESRX, and we believe shares will continue to trade higher in the near term as the removal of the primary overhang is likely to drive improving sentiment in the near term. That said, we are maintaining our Neutral rating on WAG, as we point to uncertainty around the company's ability to recapture scripts/earnings, the threat of continuing reimbursement pressure, and our cautious view around the Alliance Boots transaction. In the following note, we provide some thoughts around script recapture potential and reimbursement under the new contract, and also discuss our update estimates.” Walgreens closed at $34.62 on Thursday.