) touched a new 52-week high of $53.48 on Thursday, Sep 12, 2013
following uplifted recommendation from the Global Investment
Research Division of
The Goldman Sachs Group Inc.
). The closing price of $53.29 of the largest drug store chain in
the U.S. represents a robust year-to-date return of 40.02%.
The Stock Driver
According to several sources, Goldman Sachs recently upgraded
Walgreens from Buy to Conviction Buy. The upgraded recommendation
comes as the analyst considered Walgreens to be
"underappreciated". The lifted rating sparked market optimism as
stock price of Walgreens climbed 5.01% (or $2.54) higher to reach
an all time high on Thursday.
Goldman Sachs seems optimistic on Walgreens on the back of its
aggressive merger and acquisition activity. Walgreens in its most
recent effort to boost its market presence, declared a definitive
agreement to acquire certain assets of privately owned regional
pharmacy chain Kerr Drug, including 76 retail drugstores and
specialty pharmacy business. The acquisition also includes a
Furthermore, the company's deal making spree includes a 10-year
), effective Sep 1, 2013, to improve its global pharmaceutical
supply chain for branded as well as generic drugs. Its
three-pronged deal with AmerisourceBergen underlines a strategic
collaboration, equity alignment and distribution agreement. This
long-term agreement is expected to create a kingpin in the
prescription drug purchasing space.
The upgraded recommendation from Goldman Sachs also takes into
account Walgreens' strides to attain synergies from its deal with
its partner - Alliance Boots GmbH and the reconciliation of the
Express Scripts Holding Company
). The healthcare reforms should provide further upside to
Evidently, Walgreens' deftly chalked out strategy to boost its
market presence in the U.S. and across the Atlantic inspired
confidence. According to Goldman Sachs, the company is well
poised to gain from these tailwinds in the near future and over
the long haul.
This upgrade by Goldman Sachs should provide a major boost to the
company. Moreover, it is expected to help uphold investor
confidence in the largest drugstore chain in the country.
Currently, the stock carries a Zacks Rank #3 (Hold).
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