Jefferies Cuts Price Target on Walgreen (WAG), Encourges a Settlement with Express Scripts (ESRX)
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Price: $76.05 --0%
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reaffirming its Buy rating on shares of Walgreen (NYSE: WAG) and is reducing its price target from $50 to $46 following its Q4 conference call.
The company reported better than expected Q4 results with EPS of $0.57, topping the firm by $0.03 and the consensus by $0.02. The firm notes that the upside was driven by better than expected margins, solid SG&A, and strong comp sales.
The firm reports that the worst case with the loss of the merger of Express Scripts (Nasdaq: ESRX) is a $0.21 loss in earnings per share for 2012.
An analyst at Jefferies comments, "We believe it behooves both ESRX and WAG to come to a settlement, especially as ESRX would essentially be sending a chunk of business to a major competitor, CVS Caremark (NYSE: CVS). WAG’s equity price, however, suggests that investors have not only discounted for the ESRX loss but also some of the potential loss of the Medco (NYSE: MHS) business as well, due to the proposed merger."
The firm is maintaining its Q1 EPS estimate of $0.67 but is lowering its 2012 estimate by $0.06 to $3.00. For 2013, Jefferies continues to forecast EPS of $3.42.
For more ratings news on Walgreen click here and for the rating history of Walgreen click here.
Shares of Walgreen closed at $33.77 yesterday.
The company reported better than expected Q4 results with EPS of $0.57, topping the firm by $0.03 and the consensus by $0.02. The firm notes that the upside was driven by better than expected margins, solid SG&A, and strong comp sales.
The firm reports that the worst case with the loss of the merger of Express Scripts (Nasdaq: ESRX) is a $0.21 loss in earnings per share for 2012.
An analyst at Jefferies comments, "We believe it behooves both ESRX and WAG to come to a settlement, especially as ESRX would essentially be sending a chunk of business to a major competitor, CVS Caremark (NYSE: CVS). WAG’s equity price, however, suggests that investors have not only discounted for the ESRX loss but also some of the potential loss of the Medco (NYSE: MHS) business as well, due to the proposed merger."
The firm is maintaining its Q1 EPS estimate of $0.67 but is lowering its 2012 estimate by $0.06 to $3.00. For 2013, Jefferies continues to forecast EPS of $3.42.
For more ratings news on Walgreen click here and for the rating history of Walgreen click here.
Shares of Walgreen closed at $33.77 yesterday.
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