Walgreens Boots Alliance Inc. (WBA) and DoorDash, announced a new collaboration for on-demand delivery of over-the-counter drugs to customers in select U.S. cities with plans to expand to markets throughout the country.
The delivery service will be initiated in the Chicago, Atlanta and Denver areas, where customers can order on-demand delivery from Walgreens through the DoorDash app and website, selecting from an assortment of more than 2,300 convenience, health and wellness items.
By the end of this summer, the drugstore chain operator and DoorDash plan to sell more than 5,000 items for delivery on the DoorDash platform, and will expand the service to other major markets starting with Cincinnati, Cleveland, Minneapolis, Oklahoma City, Phoenix, Sacramento and Seattle.
“Our collaboration with DoorDash is the latest example of our ongoing focus on enhancing our customer experience with new convenient, accessible and safe shopping and delivery options,” said Stefanie Kruse, VP of digital commerce at Walgreens. “We continue to offer additional ways to get essential retail products into the hands of customers at their door stoop or wherever and whenever is most convenient for them.”
Stay-at-home mandates tied to the coronavirus pandemic have created opportunities for companies to expand their delivery reach and boost online channels. Last month, DoorDash announced that it partnered with CVS Health Corp., the first pharmacy to join the platform, to deliver non-prescription drugs and other essentials.
Earlier this month, Walgreens reported that its total digitally initiated sales rose 22.7% in the third quarter, compared with the same period last year. The drugstore chain has recently formed a strategic partnership with Microsoft (MSFT) and Adobe to launch a marketing technology and customer data platform for personalized healthcare and shopping experiences.
With Walgreens’ stock down now 30% year-to-date, analysts are sidelined on the stock. The Hold analyst consensus shows 10 Hold ratings versus 1 Sell rating. Looking ahead, the $43.73 average price target implies 5.6% upside potential from current levels. (See Walgreens stock analysis on TipRanks).
Morgan Stanley analyst Ricky Goldwasser this month cut the stock’s price target to $45 from $49 and reiterated a Hold rating, saying that investors are weighing whether, or not the challenges the company is exposed to are valued into the shares.
Goldwasser remains cautious for now and lowered her full-year per share earnings forecast by 8 cents to $5.48. The analyst expects Walgreens to report EPS of $1.16 in the fourth quarter, which is slightly below consensus estimates.
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