Morgan Stanley Maintains Overweight on Walgreens

Morgan Stanley is out with its report today on Walgreens WAG, maintaining Overweight. In a note to clients, Morgan Stanley writes, "Gross margins could be soft in the near-term, but we know gross margin dollars will be expanding starting in December as the new generics arrive, so we are watching for the other factors that will join that 2012 trend. With a clear valuation catalyst approaching, and an earnings expansion thesis that is not waiting for an economic recovery, we view Walgreens as our top pick in our coverage universe." At the time of posting, shares of WAG were trading pre-market at $44.65, up 0.61% from Thursday's close.