They’re calling it “pharmageddon,” as pharmacists across several major chains walk off the job, citing low pay and intense workloads. But for pharmacy stocks CVS (NYSE:CVS) and Walgreens (NASDAQ:WBA), they’re not looking for any serious impact to come from these walkouts. While there are signs they may be wrong, investors are taking their word for it. CVS shares are up 1.34% in Thursday afternoon trading, while WBA shares are up better than a whopping 4.5% in the session.
Both CVS and Walgreens saw pharmacists unexpectedly depart their positions for a three-day walkout, but neither pharmacy chain expected the walkout to have much impact on overall operations. CVS’ CEO, Carol Lynch, noted that not one store closed, nor were any shifts disrupted. Apparently, at CVS, only “some” employees at a “few” locations called in sick. Meanwhile, at Walgreens, the picture was only slightly more impacted; there were just three temporary store closures over the three days of Pharmageddon. The original plan called for up to 4,500 pharmacists to pull out, with potentially thousands more set to follow if the stores didn’t plan to retaliate, according to word from labor organizer Shane Jerominski.
A report from Axios, however, suggests that Walgreens might end up taking more damage from this than CVS, and at a terrible time overall. Walgreens stock is down over 40% so far this year. It was already having a tough time due to labor shortages and rising competitions from a range of customers, from big box stores, grocery stores, mail-order operations and, disturbingly, Amazon (NASDAQ:AMZN). A recent downgrade at S&P that put Walgreens’ credit one step above junk certainly didn’t help. And now with pharmacists walking out in numbers sufficient to shutter stores for three days, that could be the last straw for Walgreens.
What are the Best Pharma Stocks to Invest in 2023?
Turning to Wall Street, the two major pharmacies in question are fairly closely matched in upside potential, but CVS stock is the clear overall winner. This Strong Buy-rated stock’s average price target of $89.38 allows it a 28.33% upside potential. Meanwhile, Hold-rated WBA stock offers only a 24.66% upside potential on an average price target of $26.89.
