Pharmacy chain Walgreens Boots Alliance (WBA) was among the many early leaders within the Dow Jones Industrial Common Monday after receiving an improve upon arrival of its new CEO. WBA inventory surged premarket.
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JPMorgan upgraded WBA inventory to an chubby ranking from impartial early Monday as Tim Wentworth formally took over as CEO. The corporate introduced Wentworth’s appointment on Oct. 11. He assumed the position Oct. 23.
“At present commences a brand new period” for WBA inventory, JPMorgan analyst Lisa Gill wrote in a analysis notice. Walgreens has a possibility to rid itself of a number of weighing points within the coming quarters and enhance efficiency with a revamped, well being care-focused administration staff and a “lowered however credible bar,” Gill wrote. She additionally expects the corporate’s money move to enhance in fiscal 2024. JPMorgan lifted its value goal on WBA inventory to $30 from $27 — 41% above the place shares completed Friday.
New Administration
Wentworth had served as CEO of Specific Scripts, a number one pharmacy advantages supervisor, beginning in 2015, and through its $54 billion acquisition by Cigna Group (CI) in 2018. He was then appointed CEO of Evernorth, Cigna’s well being companies group which companions with well being plans, employers and authorities organizations, launched in 2020.
An announcement from Stefano Pessina, Walgreens government chairman, pointed to Wentworth’s “profound experience within the payer and pharmacy house in addition to provide chain, IT and Human Sources.”
The Dow Jones inventory is coming off its This autumn outcomes from Oct. 12. Adjusted earnings fell 16% to 67 cents per share whereas income rose 8.7% to $35.42 billion. FactSet analysts anticipated earnings of 69 cents per share on $34.79 billion in gross sales.
Walgreens posted double-digit earnings declines in 5 of the previous six quarters.
Walgreens guided full-year 2024 earnings to vary between $3.20 and $3.50 per share adjusted, down from $3.98 for fiscal 2023. Wall Avenue forecasts FY24 earnings of $3.36 per share on 2.9% income development to $143.07 billion.
Rival Chapter
Elsewhere, rival drug chain Ceremony Help (RADCQ) filed for Chapter 11 chapter protections on Oct. 15. The corporate faces losses and lawsuits from the opioid epidemic, whereas your entire sector grapples with a number of things, together with rising competitors from Walmart (WMT) and Amazon (AMZN).
The Justice Division sued Ceremony Help in March, alleging the Philadelphia-based chain knowingly stuffed illegal prescriptions for opioids and different managed substances. Ceremony Help denied wrongdoing and referred to as the claims “hyperbolic,” and filed a movement to dismiss the lawsuit, the AP reported. The corporate claims it exceeded regulatory necessities for prescription controls.
Ceremony Help additionally stated it obtained $3.45 billion in financing from a few of its lenders to assist its chapter course of. The Chapter 11 submitting within the U.S. Chapter Court docket of New Jersey listed $7.6 billion in property and $8.6 billion in whole money owed.
Final week, Ceremony Help introduced plans to shut 154 of its roughly 2,300 shops in 10 states, the New York Instances reported.
WBA Inventory
WBA inventory jumped 3.1% early Monday. Shares of the Dow Jones big are buying and selling close to their lowest ranges since 2009. Walgreens inventory tumbled 41.8% up to now this 12 months.
The New York Inventory Alternate delisted Ceremony Help inventory on Oct. 16 but it surely trades on OTC markets below the ticker RADCQ. Shares have been little modified Monday, hovering round 27 cents per share. Ceremony Help inventory dove 92% in 2023.
Elsewhere, CVS Well being (CVS) ticked larger Monday morning.
You may observe Harrison Miller for extra inventory information and updates on X/Twitter @IBD_Harrison
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