Walgreens gains as Cowen adds another upgrade on healthcare pivot
Bruce Bennett/Getty Images News

Walgreens Boots (NASDAQ:WBA) shares trended higher in early trading Tuesday after the pharmacy retailer won its third major upgrade on Wall Street in recent weeks as Cowen raised its recommendation citing the company's strategic shift to healthcare services. 
Lifting the rating to Outperform from Market Perform, the analysts led by Charles Rhyee pointed to WBA's acquisition of home care provider CareCentrix and its investments in primary care subsidiary VillageMD which also plans to acquire health care provider Summit Health.
Cowen expects Walgreens' (WBA) U.S. retail segment to make up only 66% of the company's adj. operating income in FY25, down from 80% in FY23 after accounting for earnings from AmerisourceBergen (ABC).
"And while execution remains a risk, particularly given the macro environment, WBA's current valuation already discounts this risk," the analysts wrote, citing trading multiples and raising their price target to $54 from $43 per share.
However, the team still expects Walgreens' (WBA) U.S. retail segment to improve with tailwinds from treatment trends in H2 FY23 from improved staffing and patients referred from Summit Health which was not part of the company's guidance. 
Cowen's bullish stand on Walgreens (WBA) comes after JPMorgan and Deutsche Bank upgraded the stock citing its shift to healthcare in the wake of the VillageMD/ Summit Health deal.