Shares of Walgreens Boots Alliance Inc. rallied 1.6% in premarket trading Friday, after J.P. Morgan turned bullish on the drugstore chain and healthcare services company, citing expected benefits from the company’s “transformational consumer-centric healthcare strategy.” Analyst Lisa Gill noted Walgreens has “significantly invested” in the launch of Walgreens Healthcare, which looks to improve outcomes and lower overall costs. Gill also believes Walgreens will gain share in the retail pharmacy market over the long term. She raised her rating on the stock to overweight from neutral, while keeping the price target at $42. “The faster than expected ramp in Walgreens Healthcare, creates the potential for the segment to be a material contributor in the medium-term,” Gill wrote in a note to clients. “Further, the cost transformation program has driven above-expectation savings creating a profitability tailwind.” The stock has gained 4.9% over the past three months through Thursday, while the Dow Jones Industrial Average has eased 1.3%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.