J.P. Morgan Raised Price Target On Walgreens After Earnings (WAG)

J.P. Morgan Chase & Co. raised the price target on shares of Walgreen Company WAG to $38 from $32, after the company reported much better than expected earnings. It is keeping its Neutral rating on shares, saying it wouldn't chase shares after the run up. In the research note, J.P. Morgan writes, "While we have been looking for an opportunity to become more positive on WAG shares based on the slowing pace of new store openings and the positive impact from the Rewiring and CCR initiatives, given the lack of consistency and no forward guidance from the company, we believe it is difficult to have a high level of conviction in the earnings outlook going forward. While the company is making progress on the expense front, we point to headwinds on the gross margin side, with FY11 being a weaker year for generic launches, coupled potential ongoing reimbursement pressure." Shares of Walgreen gained more than 11% yesterday to close at $3.46, to close at $33.81.