NEW YORK (TheStreet) -- Shares of Walgreens Boots Alliance (WBA) are advancing, up 0.53% to $84.73 on Tuesday after Leerink raised its price target to $95 from $85 while maintaining its "outperform" rating.
The firm also increased 2015 earnings estimates to $3.75 per share from $3.65.
The Pharmaceutical Wholesale segment will likely see slow and steady growth with less international drug inflation than in the U.S., Leerink noted.
"While it will take time for changes to translate into an acceleration of health and beauty sales, we expect meaningful embedded growth from ongoing joint purchasing synergies, private label brand cross selling, further international expansion through acquisitions, and cost cutting efforts," Leerink analysts said.
Walgreens Boots Alliance, based in Deerfield, IL, is a retail pharmacy holding company that owns Walgreens, Boots, and a number of pharmaceutical manufacturing, wholesale and distribution companies.
Separately, TheStreet Ratings team rates WALGREENS BOOTS ALLIANCE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WALGREENS BOOTS ALLIANCE INC (WBA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 35.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 185.2% when compared to the same quarter one year prior, rising from $716.00 million to $2,042.00 million.
- Net operating cash flow has increased to $1,306.00 million or 18.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.48%.
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that WBA's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: WBA Ratings Report