UPDATE: Credit Suisse Upgrades Walgreen Co. To Ouperform

Credit Suisse is upgrading Walgreens WAG to Outperform from Neutral. It believes the combination of a continued fundamental turnaround, strong accretion from the generic wave, and the sector's unique leverage to CPG inflation/insulation from higher gas prices make the stock a compelling investment idea. While near-term momentum has stalled following Q2 earnings, it still believes the 2012 outlook remains underappreciated and see the recent pullback as a buying opportunity. Credit Suisse's $46 PT represents 17% upside. Well positioned to navigate higher gas prices and CPG inflation. Drugstores' convenience based format, natural flow of traffic from pharmacy, and low average ticket should insulate the sector from high gas prices and allow companies to fully pass through front-end product cost inflation. Credit Suisse believes sales could actually accelerate in this environment. WAG is trading higher at $39.52