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Loop Capital analysts initiated coverage of Walgreens Boots Alliance (NASDAQ:WBA) with a Buy rating and $45 price target on Thursday.
The analysts said in a research note to clients that their firm believes that the company’s new healthcare platform will “significantly enhance the value of its stores to consumers by affording them more convenient access to healthcare services.”
“Over the past two years, the company has also lowered its costs and assembled a portfolio of healthcare providers that we expect to strengthen WBA’s core retail business and accelerate its growth and profitability by increasing its engagement with consumers,” the analysts wrote.
The firm’s enthusiasm for WBA’s new healthcare business stems from the rollout of a national primary care platform and the acquisition of new services for institutions and managing care at home.
On the retail front, the analysts explain that drugstore pharmacists have traditionally been “significantly underutilized,” and WBA is eliminating unnecessary tasks so that they can spend more time on the work they were trained to do.
“We believe that most of the potential upside in WBA’s growth, earnings and stock price derives from its VillageMD, Shields Health Solutions and CareCentrix businesses, but WBA’s investment portfolio alone could be worth half or more of the company’s present enterprise value of $40 billion,” the analysts argued.
