Goldman Sachs Lifts PT on Walgreen (WAG), Maintains Top Rating Post Q1 Noise

December 28, 2012 7:33 AM EST
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Price: $76.05 --0%

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Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Goldman Sachs raised its price target on Walgreen (NYSE: WAG) from $42 to $44 while reiterating its Conviction Buy List rating following recent Q1 results which, according to the firm, "demonstrated solid underlying trends, supported by building reclamation of scripts lost during its impasse with ESRX, well controlled expenses given the breadth of the firm’s initiatives, and a spike in gross margin supported by generics."

The firm noted that the delay in reporting its share of earnings from Alliance Boots created headline noise, reducing earnings, but that income should be reclaimed next year. However, all the pieces are in place for the company to deliver solid results over the balance of its fiscal year, and they expect a strong December sales update given ongoing script reclamation and a recent pick-up in flu incidence.

The firm trimmed its FY13 EPS estimate from $3.34 to $3.25 on the change in timing of Alliance Boots earnings, a slightly higher share count, and lower LIFO add-back given greater generic deflation.

For an analyst ratings summary and ratings history on Walgreen click here. For more ratings news on Walgreen click here.

Shares of Walgreen closed at $36.53 yesterday.

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