Walgreens Boots Alliance Inc. WBA,
analysts will benefit from the digital knowledge that the newly announced CEO, Rosalind Brewer, brings to the role.
Brewer joins Walgreens of Starbucks Corp. SBUX,
where she was chief operating officer. Previously, he was CEO of Sam’s Club, Walmart Inc. see WMT,
warehouse dealer based on membership. She previously worked for Kimberly-Clark Corp. for more than two decades. KMB,
Brewer is on the board of Amazon.com Inc. AMZN,
and retires on February 16.
See: Walgreens assumes Starbucks executives as CEO of Roz Brewer
And: Starbucks COVID-Related Sales Shift Contains Larger Group Orders
‘Although we are surprised that WBA did not hire a CEO with a more healthcare background, it is our understanding that Ms. Brewer is considered very good and provides a deep experience in retail, ‘Mizuho Securities analysts wrote in a note.
“Furthermore, Ms. Brewer is a current board member of Amazon, who is likely to rate the stock higher, given her insight into e-commerce.”
Its digital capacity has also been adapted by Starbucks, which has a thriving loyalty program and mobile business.
Shares in Walgreens rose 4.8% on Wednesday after the announcement late Tuesday.
Brewer succeeds Stefano Pessina, who announced his departure in July. He becomes executive chairman of the Walgreens board.
Brewer begins March 15th. If she takes the position, she will be the only black woman CEO in the Fortune 500 and one of the few black executives to hold the title of a Fortune 500 company.
Mizuho analysts were excited about the Walgreens future and the role Brewer could play in it.
Also: Walgreens sells majority stake in Alliance Healthcare pharmacy to AmerisourceBergen in $ 6.5 billion deal
‘Me. Brewer is starting at WBA at an exciting time, as the company is going to be a major player in the administration of COVID-19 vaccine, which should not only be a financial wind, but, more importantly, we think there will be be an unobstructed positive perception impact. it can create customer loyalty in the era of e-commerce, ”said analysts.
But the company faces challenges.
“However, her appointment does not erase the operational and competitive structural issues facing WBA from the lack of business diversification and the lack of solvency. ‘
Walgreens is in a retail sector that has consolidated and become increasingly competitive. Mizuho says Walgreens has lost market share to CVS Health Corp. CVS,
Mizuho rates Walgreens’ shares neutral with a price target of $ 47.
“We are looking forward to seeing Mrs. To hear Brewer’s strategic vision for the future of the business, and we see it as a good fit, given WBA’s focus on the growth of its core retail pharmacy business following the recently announced sale of the Alliance Healthcare pharmaceutical distribution business to AmerisourceBergen, “JPMorgan analysts wrote in a note.
The analysts highlight Walgreens’ strategic focus on the retail business, including improved digital capabilities.
JPMorgan rates Walgreens’ stock neutral.
Walgreens’ share has risen 43% over the past three months, but has fallen 1.4% over the past year.
The standard S&P 500 index SPX,
has increased by 15.7% over the past 12 months.