Goldman Sachs Increases Price Target for Walgreens (WAG)

Goldman Sachs announced on Friday that they have increased their price target for drugstore chain, Walgreen Company(WAG).

The firm reported that they have maintained their “Conviction Buy List” rating for WAG, and have increased the company’s price target from $42 to $44. This price target suggests a 17% increase from the stock’s current price of $36.53.

Analysts believe that although the company’s price dropped after the earnings for Alliance Boots were delayed, the stock will recover in 2013. The firm sees WAG producing solid results next year.

An analyst from the firm commented, “demonstrated solid underlying trends, supported by building reclamation of scripts lost during its impasse with ESRX, well controlled expenses given the breadth of the firm’s initiatives, and a spike in gross margin supported by generics.”

The firm, which estimated FY2013 results prior to the earnings delay, has reduced its estimates for FY2013 from $3.34 per share to $3.25 per share.

Walgreens shares were mostly flat during premarket trading Friday. The stock is up 10.5% YTD.

The Bottom Line
Shares of Walgreen Company (WAG) have a 3.01% dividend yield, based on last night’s closing stock price of $36.53. The stock has technical support in the $33-$34 price area. If the shares can firm up, we see overhead resistance around the $38-$40 price levels.

Walgreen Company(WAG) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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