Just weeks ago, Walgreens (NASDAQ:WBA) made headlines with its growing pharmacy automation unit. Now, reports emerge that it’s considering selling it off. It may seem strange on the surface, but investors are happy, as Walgreens shares are up slightly in Wednesday afternoon’s trading.
Not long ago, Walgreens opened its ninth automated micro-fulfillment operation, a system that would take some weight off human pharmacists who were working to fill prescriptions. Walgreens stepped up its automation as it discovered that finding human pharmacists was a tougher job than usual of late. Thus, it wanted to keep the current crop in the fold by not working them half to death and potentially pull more in with the promise of lighter workloads.
Now, Walgreens may have an interested buyer for that unit instead, with a price tag of up to $2 billion. A sale could be rapidly forthcoming; reports note that the process could start as soon as next month. Walgreens may offer the business to everyone from private equity firms to other healthcare companies. Why the firm would sell a business that’s giving it a clear edge in the market is unclear. However, given that Walgreens spent $451 million just two years ago to get the business, selling it off for over four times what it paid is reason enough in and of itself.
Meanwhile, Wall Street has faith in WBA stock. Analyst consensus calls it a Moderate Buy with 20.4% upside potential thanks to its average price target of $43.43 per share.
