Walgreens price target cut to $67 from $77 at Morgan Stanley

Analysts at Morgan Stanley cut their price target on shares of Walgreens Boots Alliance Inc. to $67 from $77 on Tuesday, citing a "combo of decelerating generic purchasing benefit, lower brand inflation and vertical deals closing" that could make it difficult for management to meet earnings expectations. Shares of Walgreens fell 1.3% on Tuesday morning. The drugstore chain recently acknowledged that it is facing reimbursement headwinds as well as pressure from deflation of generics. Morgan Stanley analysts led by Ricky Goldwasser said generic manufacturers have scaled back channel discounts to large purchasing groups, including Walgreens, and that the company is seeing higher reimbursement pressure given the lack of offsetting subsidies from other businesses. Goldwasser maintained his equal-weight rating on Walgreens stock. Shares of Walgreens have fallen 9.4% in the past 12 months, while the Dow Jones Industrial Average has gained 3.8%. The S&P 500 has gained 2.6%.

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