Odlum Brown Analyst Rates Shoppers Drug Mart a Buy

Shoppers Drug Mart (SHDMF.PK) had a strong second quarter despite a weak economy in Ontario, says Murray Leith, analyst at Odlum Brown, who has a 'buy' rating on the shares with a target price of C$66.

He added:

Shoppers Drug Mart is well managed and positioned to grow earnings at a double-digit pace for several years," he wrote in a note to clients.
Sound strategies for growing sales and margins include "pharmacy innovation, private label, global sourcing, loyalty programs, prestige cosmetics and
exclusive brands.

Mr. Leith's price target is based on a multiple of 22 times estimated per-share earnings of C$3 for 2009.