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Walgreens Jumps as Wall Street Weighs In on New CEO Hire

Walgreens named Rosalind Brewer as its new CEO, making her the only female African American CEO of a Fortune 500 company.
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Shares of Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc. Report jumped Wednesday after the company announced late Tuesday that it will name departing Starbucks  (SBUX) - Get Starbucks Corporation Report executive Rosalind Brewer as its new CEO effective March 15.

Walgreens Boots shares rose 5.2% premarket on the news after also rising after hours Tuesday. Brewer most recently served as chief operating officer of Starbucks and before that was CEO of Walmart's  (WMT) - Get Walmart Inc. Report Sam's Club division for five years. Upon taking over the reins at Walgreens, Brewer will become the only current Black female CEO in the S&P 500 index, according to Bloomberg.

Analyst firms were mostly bullish on the news Wednesday. 

Jefferies maintained its hold rating but called Brewer "an impressive CEO hire," according to Bloomberg, due to her track record in the consumer sector. However the firm also questioned "how the appointment of a CEO with a consumer background would influence WBA's strategic direction, at a time when a bigger push into healthcare space appears needed."

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Cowen, which has a market perform rating on the Walgreens, was also positive on the hire, saying "focus on finding a CEO who has led businesses through periods of significant transformation, as traditional retail models adapt to a more digital world and changing consumer behavior."

Guggenheim, which has a buy rating, predicted shares would react positively to the news Wednesday, but that there could also be pushback for investors who were looking for a hire from the healthcare sector. 

Brewer will be taking over from billionaire Stefano Pessina, who has been CEO since 2015. Pessina, who owns more than 16% of Walgreens, will become executive chairman.

Brewer’s digital expertise made her an ideal candidate to oversee the company’s transformation, Pessina told Bloomberg. That and her leadership skills will make up for her lack of experience in the healthcare industry, he said.

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