Retail pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) has been facing backlash following news that it would stop selling the Mifepristone abortion pill in some Republican-led states. WBA shares fell 3.7% on Tuesday, as California Governor Gavin Newsom tweeted that the state will not do business with Walgreens or “any company that cowers to the extremists and puts women’s lives at risk.”
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A spokesperson for the governor said “all relationships” between Walgreens and the state were now under review. Last week, Walgreens said that it does not intend to dispense abortion pills in 20 states, including where abortion remains legal, in response to a letter from some Republican attorney generals who warned of legal action if the company began distributing the drugs.
According to Politico, Walgreens is not yet distributing the pills anywhere in the country but is seeking certification to do so in certain states.
Walgreens Clarifies Stance
Walgreens clarified its stance, saying, “Walgreens plans to dispense Mifepristone in any jurisdiction where it is legally permissible to do so. Once we are certified by the FDA, we will dispense this medication consistent with federal and state laws. Providing legally approved medications to patients is what pharmacies do, and is rooted in our commitment to the communities in which we operate.”
In January, the U.S. Food and Drug Administration (FDA) allowed retail pharmacies to sell Mifepristone, including by mail, to customers having prescriptions issued by certified prescribers.
The potential financial impact of Governor Newsom’s decision to ban Walgreens could be significant as California is the most populous state in the U.S. and a key market for the company. On the other hand, the company cannot afford to ignore the concerns of Republican-dominated states. For the time being, Walgreens seems to be caught between the devil and the deep sea.
Is WBA a Good Buy?
Wall Street’s Hold consensus rating for Walgreens is based on one Buy, six Holds, and two Sells. The average WBA stock price target of $39.75 suggests 16.4% upside.
