Janney Montgomery Scott Downgrades Drugstore.com (DSCM) to Neutral on Limited Potential Upside

Janney Montgomery Scott downgraded Drugstore.com (NASDAQ: DSCM) from Buy to Neutral. PT $3.

JMS analyst says, "We are lowering our rating on DSCM to Neutral based on limited potential upside (risk/reward) following announcement of Walgreens' (NYSE: WAG) acquisition...We believe the deal is a strong strategic fit, as WAG can leverage online expertise - especially in beauty & vision, while the combination should enhance WAG's multi-channel capabilities (buy online, pick up in store etc). We believe a competing bid is somewhat unlikely (WAG is more progressive online than its retail competitors), while the acquisition price appears a bit low on a revenue/customer basis yet more appropriate on near-term EBITDA."

For more ratings news on Drugstore.com click here and for the rating history of Drugstore.com click here.

Shares of Drugstore.com closed at $1.79 yesterday, with a 52 week range of $1.48-$3.95.

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