BofA lowered the firm’s price target on Walgreens Boots Alliance to $22 from $24 and keeps an Underperform rating on the shares after FY24 guidance was introduced that was below consensus and the firm’s estimates, reflecting headwinds in the core business that could be challenging to offset through the ramp in U.S. Health and cost-savings initiatives. The updated transformation target to $1B in FY24 “continues to represent the majority of our FY24 EBIT estimate” and while Walgreens remains committed to the dividend and retaining its investment grade debt rating, the firm retains concerns around the sustainability of cash flow, the analyst added.
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