RBC Says This Pharmacy Chain Has Health Investments On Track Despite Abandoning Divestiture - Walgreens Boots Alliance (NASDAQ:WBA)

RBC Capital Markets lowered the price target on Walgreens Boots Alliance Inc WBA to $42 (10% upside) from $46 and maintained the Sector Perform rating.
The analysts say that WBA posted solid fiscal 3Q22 results slightly ahead of their estimates and consensus on steady execution in the U.S. against a difficult comp and continued recovery in the international business.
Related: Walgreens Posts Fall In Q3 Profit On Opioid Settlement, Lower Pharmacy Sales.
"While we are somewhat disappointed by the abandonment of the Boots divestiture as a catalyst for incremental healthcare investments, we are encouraged by management's commitment to prioritizing Walgreens Health as a core long-term growth avenue," RBC wrote.
Also Read: Walgreens Retains Boots Business Ownership Amid Market Instability
Despite abandoning the Boots sale, the analysts write that the company remains on track with Walgreens Health investments, with solid pro forma growth momentum.
Pro forma sales among VillageMD and Shields grew 65% in the quarter.
RBC says that with a $31 million investment in organic growth during the quarter, the business can potentially generate sales of $2 billion in 2022, partially hampered by the delayed closing of the CareCentrix investment, expected by year-end.
RBC lowered 2023 estimated earnings in anticipation of economic headwinds impacting the retail sector.
Price Action: WBA shares are down 0.88% at $38.22 during the market session on the last check Tuesday.
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