Walgreens Accelerates Investment in VillageMD to Ramp Up Rollout of Clinics

Walgreens Boots Alliance has accelerated its funding in VillageMD to help the opening of 600-700 Village Medical main care clinics at Walgreens places in over 30 US markets throughout the subsequent 4 years. The 2 corporations purpose to construct a whole bunch of further clinics thereafter.

Walgreens (WBA) disclosed that it has now accomplished a $750 million funding after the 2 corporations renegotiated the phrases of their agreements to make sure accelerated funding to ramp up the tempo and scale of the rollout of the clinics. This brings the whole funding made by Walgreens to $1 billion, together with the preliminary fairness funding of $250 million. Walgreens and VillageMD additionally adjusted sure different phrases underneath the agreements.

Walgreens’ CEO Stefano Pessina said, “By these conveniently positioned clinics at our neighborhood shops, we are going to uniquely combine the pharmacist as a essential member of VillageMD’s multi-disciplinary care workforce to supply sufferers with personalised and coordinated care.”

In July 2020, Walgreens and VillageMD had initially introduced their settlement to open 500 to 700 clinics, underneath which, Walgreens would make investments $1 billion (in fairness and convertible debt) in VillageMD over a interval of three years. (See WBA stock analysis on TipRanks)

On December 24, Morgan Stanley analyst Ricky Goldwasser reiterated a Maintain ranking on Walgreens with a $40 value goal. Forward of the corporate’s fiscal first quarter outcomes, the analyst said that “traders might want to stability between” near-term headwinds related to the affect of further lockdowns in Europe and utilization patters within the US, quantifying the potential vaccine alternative and the affect on earnings within the second half of FY21 and FY22, and to a lesser extent, the dynamics of the McKesson three way partnership.  

Walgreens shares have declined 28% over the previous 12 months and the typical price target of $41.20 implies additional draw back potential of 4.3% within the 12 months forward. General, Walgreens scores the Avenue’s Maintain analyst consensus based mostly on 6 Holds and 1 Promote.  


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