Walgreens Boots Alliance Inc. WBA,
they will benefit from the digital knowledge that Rosalind Brewer, the company’s recently announced CEO, brings to the paper, analysts say.
Brewer joins Walgreens of Starbucks Corp. SBUX,
where he was chief of operations. Previously, she was CEO of Sam’s Club, WMT of Walmart Inc.,
member-based warehouse retailer. He previously spent more than two decades at Kimberly-Clark Corp. KMB,
Brewer is on the board of Amazon.com Inc. AMZN,
and will leave that role on February 16th.
See: Walgreens goes on to run Starbucks to Roz Brewer as the new CEO
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“While we are surprised that WBA does not hire a CEO with more health experience, we understand that Ms. Brewer is well-regarded and brings deep experience in retail,” Mizuho Securities analysts wrote in a note.
“In addition, Ms. Brewer is a current board member of Amazon, which will likely re-evaluate the shares in light of her ideas about e-commerce.”
Its digital capability has also been perfected at Starbucks, which has a thriving loyalty program and a mobile business.
Shares of Walgreens rose 4.8% in trading on Wednesday following the announcement at the end of Tuesday.
Brewer succeeds Stefano Pessina, who announced his departure in July. He will become executive chairman of the Walgreens board.
Brewer begins on March 15th. When she takes office, she will be the only black woman CEO of the Fortune 500 and one of the few black executives to hold the title of CEO of a Fortune 500 company.
Mizuho analysts were optimistic about the future of Walgreens and the role Brewer can play in it.
Too: Walgreens sells most Alliance Healthcare pharmaceutical companies to AmerisourceBergen on a $ 6.5 billion deal
“Ms. Brewer is starting the WBA at an exciting time, as the company will be a key player in the administration of the COVID-19 vaccine, which should not only be a final wind, but, most importantly, , we also believe there will be an innumerable positive perception impact this could build customer loyalty in the e-commerce era, ”analysts said.
But the company faces challenges.
“However, his appointment does not erase the operational and competitive structural problems facing the WBA, given the lack of business diversification and lack of ability to pay.”
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 values that Walgreens shares its neutrality with a target price of $ 47.
“We look forward to hearing Ms Brewer’s strategic vision for the company’s future and see it as a good option given WBA’s focus on the growth of major retail pharmaceutical companies following the recently announced sale of pharmaceutical distribution business Alliance Healthcare in AmerisourceBergen. “JPMorgan analysts wrote in a note.
Analysts highlight Walgreens ’strategic focus on the retail business, including enhanced digital capabilities.
JPMorgan rates Walgreens shares as neutral.
Walgreens shares have risen 43% in the past three months, but have fallen 1.4% in the last year.
The S&P 500 SPX benchmark,
has increased by 15.7% over the last twelve months.