Walgreens Boots Alliance Inc. WBA,
will benefit from the digital know-how that the company’s recently announced chief executive, Rosalind Brewer, brings to the role, analysts say.
Brewer is joining Walgreens from Starbucks Corp. SBUX,
where she was chief of operations. Previously, she was chief executive of Sam’s Club, WMT at Walmart Inc.,
association-based warehouse retailer. She has spent more than two decades at Kimberly-Clark Corp. KMB,
Brewer is on the board of Amazon.com Inc. AMZN,
and will leave that function on February 16.
Watch: Walgreens chooses Starbucks executive Roz Brewer as its new CEO
AND: Starbucks’ COVID-related sales shift includes orders from larger groups
“Although we are surprised that the WBA did not hire a CEO with more experience in the healthcare field, it is our understanding that Ms. Brewer is well regarded and has a deep experience in retail,” analysts at Mizuho Securities wrote in a note.
“In addition, Ms. Brewer is a current board member at Amazon, which is likely to reclassify shares based on her knowledge of e-commerce.”
Its digital capabilities have also been enhanced at Starbucks, which has a thriving mobile loyalty and business program.
Walgreens’ shares rose 4.8% in Wednesday’s trading session after the announcement on Tuesday.
Brewer succeeds Stefano Pessina, who announced his departure in July. He will become the executive chairman of Walgreens’ board.
Brewer starts on March 15th. When she takes office, she will be the only black CEO at the Fortune 500 and one of the few black executives to hold the position of executive director of a Fortune 500 company.
Mizuho analysts were optimistic about Walgreens’ future and the role Brewer can play in it.
Besides that: Walgreens sells most of Alliance Healthcare’s pharmacy businesses to AmerisourceBergen in a $ 6.5 billion deal
“Em. Brewer starts at the WBA at an exciting time, as the company will be a key player in administering the COVID-19 vaccine, which should not only be a wind in favor of money, but more importantly, we also believe there will be a non-quantifiable positive perception impact that could create customer loyalty in the e-commerce era, ”analysts said.
But the company faces challenges.
“However, his appointment does not erase the structural operational and competitive problems facing the WBA, given the lack of business diversification and the payer’s lack of capacity. “
Walgreens is in a retail sector that has consolidated itself and has become increasingly competitive. Mizuho says Walgreens lost market share to CVS Health Corp. CVS,
Mizuho values Walgreens shares as neutral, with a target price of $ 47.
“We are looking forward to hearing Ms. Brewer’s strategic vision for the company’s future, and we see it as a good option, given the WBA’s focus on growing major pharmaceutical retail businesses after the recently announced sale of the Alliance pharmaceutical distribution business. Healthcare for AmerisourceBergen, ”JPMorgan analysts wrote in a note.
Analysts highlight Walgreens’ strategic focus on the retail business, including enhanced digital capabilities.
JPMorgan evaluates Walgreens’ shares as neutral.
Walgreens’ shares have risen 43% in the past three months, but fell 1.4% last year.
The S&P 500 SPX benchmark,
increased by 15.7% in the last 12 months.