Walgreens Boots Alliance Inc. WBA,
will benefit from the digital knowledge that the company’s new CEO, Rosalind Brewer, brings to the role, analysts say.
Brewer joins Walgreens of Starbucks Corp. SBUX,
where he was chief officer. Previously, she was the CEO of Sam’s Club, WMT Walmart Inc.,
retailer with deposit. He previously spent more than two decades at Kimberly-Clark Corp. KMB,
Brewer is on the board from Amazon.com Inc. AMZN,
and will step down on February 16.
See: Walgreens names Roz Brewer its new CEO Starbucks
And: Starbucks’ COVID-related sales exchange includes larger group orders
“While we are surprised that the WBA has not hired a CEO with more experience in healthcare, we understand that Ms. Brewer is well regarded and brings deep experience in retail,” Mizuho Securities analysts wrote in a note.
“Moreover, Ms Brewer is the current member of Amazon’s board of directors, which is likely to re-evaluate the larger stock, given its outlook on e-commerce.”
Its digital capability has also been improved at Starbucks, which has a thriving loyalty and mobile business program.
Walgreens shares rose 4.8% in trading on Wednesday, following a late Tuesday announcement.
Brewer succeeds Stefano Pessina, who announced his departure in July. He will become executive chairman of Walgreens.
Brewer begins on March 15. When she takes over, she will be the only black woman CEO in Fortune 500 and one of the few black executives to hold the title of executive director at a Fortune 500 company.
Mizuho analysts were optimistic about the future of Walgreens and the role Brewer can play in it.
Also: Walgreens sells most Alliance Healthcare pharmaceutical business to AmerisourceBergen in a $ 6.5 billion deal
“Miss. Brewer is starting at the WBA at an interesting time, given that the company will be a key player in administering the COVID-19 vaccine, which should not only be a financial wind, but more importantly, we also believe , that there will be an impact of unquantifiable positive perception that could create customer loyalty in the e-commerce era, “analysts said.
But the company faces challenges.
“However, her appointment does not erase the operational and competitive structural problems facing the WBA, given the lack of business diversification and the lack of payer capacity. “
Walgreens is in a retail sector that has strengthened and become increasingly competitive. Mizuho says Walgreens lost market share to CVS Health Corp. CVS,
Mizuho values Walgreens’ neutral shares at a target price of $ 47.
“We look forward to seeing Ms. Brewer’s strategic vision for the company’s future and see it as a good fit, given the WBA’s focus on developing the retail pharmacy’s core business following the recently announced AmerisourceBergen sale of Alliance Healthcare pharma, ”JPMorgan analysts wrote in a note.
Analysts point to Walgreens’ strategic focus on retail, including enhanced digital capabilities.
JPMorgan evaluates neutral Walgreens stock.
Walgreens stock has gained 43% in the last three months, but has fallen by 1.4% in the last year.
S&P 500 SPX reference index,
increased by 15.7% in the last 12 months.