Walgreens Boots Alliance Inc. shares popped 4.6% Friday, after Deutsche Bank upgraded the stock to buy from hold. Analysts led by George Hill said they came away from a meeting with management impressed by the company’s plan to transition to a healthcare services company. “We came away from the meeting with increased faith in the company’s ability to execute on its care delivery strategy, which should lead to positive revisions and multiple expansion for WBA shares,” they wrote in a note to client. The meeting focused on Walgreen’s role in the deal announced last week in which VillageMD agreed to buy urgent care provider Summit Health-CityMD in a deal valued at $8.9 billion. Walgreens is contributing $3.5 billion in debt and equity and will remain majority shareholder of VillageMD with a 53% stake. The deal “catapults Walgreens through VillageMD into the position as one of the largest investor owned, multi-payer primary care business in the US (UNH at No. 1), expecting to exit 2023 with more than 700 locations and generating $8B in revenue,” the analysts wrote. “The Summit deal likely sidelines WBA from large scale M&A near term, as the company moves into integration mode for the next 12-18 months.” Walgreens shares have fallen 23% in the year to date, while the S&P 500 has fallen 17%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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