Morgan Stanley Calls Walgreens Selloff A Buying Opportunity

In a report published by Morgan Stanley, Walgreens WAG cost control and 2012 generics thesis is intact. Morgan Stanley said that it views today's 7% WAG selloff as a buying opportunity. “Walgreens delivered a slightly better than expected 2Q, but we believe investors were anticipating stronger upside and the flat gross margin performance this quarter has prompted some nervousness over 2H margin assumptions. We believe our thesis for cost control dovetailing into the higher margin generic drug wave remains intact and believe investors should own WAG shares for $3/share-plus earnings potential in 2012.” Walgreens closed yesterday at $39.21.