How Will Kroger (KR) Stock React to Specialty Pharmacy Deal?

Kroger (KR) announced that it would create a new specialty pharmacy with company-owned Axium and Orlando-based ModernHEALTH.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Kroger  (KR) - Get Report  reached an agreement with company-owned Axium Pharmacy to purchase the outstanding shares of ModernHEALTH and create a new combined specialty pharmacy, according to a company statement.

"This strategic investment will accelerate the growth of Kroger's health and wellness business," said Senior VP Robert Clark.

The company hopes that the deal will give Kroger customers greater access to medications that their stores don't typically carry.

Kroger currently operates 2,230 pharmacy locations and 195 clinics. ModernHEALTH, a pharmacy services company based in Orlando, FL, employs 500 associates who dispense specialty pharmacy services.

The financial terms of the deal were not disclosed, but it is subject to regulatory approvals.

Shares of Kroger, a Cincinnati-based food and drug retailer, closed up 0.51% to 436.40 on Wednesday.

Separately, TheStreet Ratings rated this stock as a "buy" with a ratings score of A-.

The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and notable return on equity. TheStreet Ratings feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that TheStreet Ratings evaluated.

You can view the full analysis from the report here: KR

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

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