Jefferies Raises Price Target on Walgreen (WAG)

Jefferies is out with a research report this morning, where it reiterates its Buy rating on Walgreen WAG; it has a $50.00 price target on the stock, up from $48.00. The Jefferies analysts cited “great” January sales and solid December results, which suggest momentum is starting to take hold. The company reported much better-than-expected sales for January, with Total, FE and Rx comps increasing 6.1%, 4.5% and 6.9%, respectively. Comp traffic trends continue to improve, up +2.4% in January and +0.9% in December, suggesting better execution at retail is now resonating in the marketplace. As for valuation, the analysts remarked, “Our PT of $50, up from $48, represents ~15.5x our CY12 estimate, roughly in-line with its average one-year forward P/E over the last five years. Moreover, with a DCF that returns an intrinsic value of over $65, there remains considerable value in the company's shares.”