Barclays taps Walgreen for outsized gains


Barclays upgrades Walgreen (WAG) to Overweight from Equalweight.

The integration of Alliance Boots into Walgreen and the potential for a tax inversion transaction give analysts plenty of meat to chew on.

The investment firm has a $92 price target on shares.

WAG +3.1% premarket ti $75.38.

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Comments (2)
  • Jack Cumming
    , contributor
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    What a remarkable piece of work by some overpaid analyst at Barclays Bank! I guess he may have felt some embarassment when he happened to notice that WAG has been trading above $60 since early February, so in a stroke of genius he now upgrades the stock to a buy from a hold and raises his "target" price to $92. The shares broke above $70 last month, and at the current price seem to be pretty fairly valued, with its forward looking P/E above 20. To my amazement, today's upgrade by Barclays seems to have moved the stock!

     

    Hey, where was this genius when the stock traded in the 30's and below during the flap with Express Scripts??? That's when I bought in the belief that "this too shall pass," and I now hold a beatiful position in WAG, but with a basis so low that I will likely never sell the shares. I know, I know............that's not the right way to view our holdings, but I use this idea: Nothing is certain in life other than death and taxes............so I let these big gains ride rather than pay the tax on the gain. I know that I'm a fool, but I happen to be a fairly wealthy fool.

     

    My point in this entry is that I believe most of our security analysts are not worth the powder to blow them to hell.
    18 Jun 2014, 10:45 AM Reply Like
  • Jack Cumming
    , contributor
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    I failed to point out that the Barclays analyst raised his target price all the way from $56 to his new target of $92! Some "adjustment," huh??

     

    Here was my assessment in June of 2012 when the stock was breaking below $30 (and I don't claim that this was rocket science by any means!):

     

    I have been betting on Walgreen regarding their "contest" with Express Scripts. It surely seems that the negative impact has been discounted in the large decline in their market cap! This has been a great retailer with an excellent management track record.

     

    I am long the stock and expect to see meaningful improvement as they digest the loss of ESRX volume or negotiate a new and mutually beneficial business arrangement. WAG management showed guts by standing up to bullying by ESRX regarding punitive pricing demands. And these major repositionings don't occur in a vacuum. Let's see if CVX and others show some backbone in future negotiations with PBM's. School is still out on this one!

     

    Hey Barclays: GET A NEW ANALYST!
    18 Jun 2014, 11:38 AM Reply Like
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