Cantor Fitzgerald Downgrades Walgreen Company to "Hold" on a Valuation Call (WAG)

Cantor Fitzgerald Downgrades Walgreen Company to “Hold” on a Valuation Call (WAG)


Cantor Fitzgerald analysts downgraded Walgreen Company (WAG) on Monday, citing a full valuation and lack of positive catalysts as reasons for the drug store chain’s downgrade.

The analysts downgraded WAG from “Buy” to “Hold” and maintain a $49 price target on the stock. This price target suggests a 0.6% upside to Friday’s closing price of $48.71.

“We recently took up the price target following better-than-expected 2Q:13 results and based on the positive long-term implications of the announcement with AmeriSource Bergen, with whom Walgreen has a 10-year comprehensive supply agreement. We expect that sales/earnings comparisons will continue to be favorable over the balance of FY:13. While Walgreen is set to report 3Q results on Tuesday, 6/25, the rationale for our rating is not earnings related. Our main issue at this time is that the recent trading range does not warrant enough upside to remain constructive on the stock at this time,” said Cantor Fitzgerald analyst Ajay Jain.

Walgreen shares were down 70 cents, or 1.44%, during pre-market trading on Monday. The stock is up 31.61% year-to-date.

The Bottom Line
Shares of Walgreens (WAG) have a dividend yield of 2.26% based on Friday’s closing price of $48.71 and the company’s annualized dividend payout of $1.10 per share.

Walgreen Company (WAG) is not recommended at this time, holding a DARS™ Rating of 3.4 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.