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Walgreens' Strong Quarter Will 'Build Confidence' In Stock: Macquarie

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Walgreens Boots Alliance Inc (NASDAQ: WBA) reported strong third quarter earnings on Thursday, exceeding earnings and comparable store sales growth expectations. In fact, each operating segment surpassed consensus estimates. The results were driven by better than expected SG&A performance, aided by larger than anticipated gross profit dollar performance.

In a report issued late-Thursday, Macquarie analyst Bob Summers and his team reiterated an Outperform rating on the stock, raising their price target from $95 to $100, under the belief that the sturdy results, combined with robust growth opportunities and improved visibility, will continue to drive appreciation.

Related Link: Walgreens Q3 Earnings Beat Views, Shares Surge

The experts highlight a few other points relevant to Walgreens investors:

  • Full year EPS guidance was raised to a range of $3.70-$3.80 from $3.45-$3.65. Macquarie now expects earnings of $3.76 per share. For fiscal 2016, the firm anticipates earnings of $4.45 per share.
  • Stefano Pessina was appointed as the permanent CEO. The firm believes this is a “significant positive outcome.”
  • The analysts think “the merger’s transformative nature, initial success and optimism around the company remaining a participant in ongoing consolidation will generally support further multiple expansion.”
  • The firm also believes Walgreens is “a beneficiary in challenging markets as investors gravitate toward large cap stable brands and particularly companies exhibiting favorable earnings momentum.”

Shares of Walgreens are up more than 4 percent in Friday trading.

Latest Ratings for WBA

Jan 2018Evercore ISI GroupInitiates Coverage OnOutperform
Dec 2017Deutsche BankInitiates Coverage OnHold
Nov 2017CitigroupMaintainsBuy

View More Analyst Ratings for WBA
View the Latest Analyst Ratings

Posted-In: Bob SummersAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Movers Trading Ideas


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