Wall Street ratings on WBA
Of the 25 analysts tracking WBA in October 2017, ~68% recommended a “buy” rating on the stock while the rest suggested a “hold.” There are no “sell” recommendations on the company. Walgreens received a rating of 2.1 on a scale of 1 (strong buy) to 5 (sell).
Jefferies, Wells Fargo, and Atlantic Equities are among the brokers who set “buy” ratings while Pivotal Research and Needham gave “hold” recommendations on Walgreens.
Over the last one-month period, two analyst firms have downgraded WBA. On October 6, Morgan Stanley lowered WBA’s rating from “overweight” to “equal-weight,” citing an expected weakening in prescription market share due to the recent preferred network exclusions.
The analyst also said that WBA’s growth in 2018 is likely to be negatively impacted by the cut in UK reimbursement rates, store closures in Puerto Rico, and lower-than-expected Rite Aid synergies.
On September 27, Raymond James reduced Walgreens to “market perform” from “outperform’ rating, citing network exclusions, UK reimbursement cuts, and US reimbursement pressures.
Wall Street ratings on CVS
While WBA has recently faced rating cuts, it has still managed a slightly better score than CVS. CVS Health is currently rated a 2.2 with 60% “buy” and 40% “hold” recommendations. Wolfe Research and Needham rated the company a “hold” while Tigress Financial and Mizuho suggested a “buy” on the stock.
With respect to recent analyst actions, RBC Capital initiated coverage on the company on September 19 with an “outperform” rating. On August 25, Loop Capital initiated coverage on CVS with a “hold” rating.
Investors looking for exposure to Walgreens and CVS can consider the VanEck Vectors Retail ETF (RTH), which invests ~9% of its portfolio in the two companies.