Tigress Financial Reiterates On Walgreens

Tigress Financial Partners reiterated its Underperform rating on Walgreen Company (NYSE: WAG).

Analyst Philip Van Deusen believed “high levels of competition and contracting reimbursement rates creates significant downside risk especially at the current valuation.”

“The current share price is implying a 39.02 percent future growth reliance which is too large given WAG’s position in the choppy pharmacy marketplace,” according to the report.

Van Deusen also noted that “WAG’s weak key business performance indicators outweigh recent positive momentum, mainly 5.8 percent sales growth, comp store scripts growth of 3.9 percent, and front-end comp store sales growth of 1.3 percent.”

Despite an increase in sales, “WAG’s net operating profit after tax (NOPAT) was lower by 4.47 percent from $3.1 billion to $2.9 billion in the last twelve months, down for the first time since 2012."

“Economic profit also turned negative for the first time for WAG in the past 5 years; down from $64.9 million to -$71.6 million.”

Walgreens recently traded at $65.51, up 0.41 percent.