We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Walgreens Boots Invests in China to Fortify Retail Pharmacy
Read MoreHide Full Article
Walgreens Boots Alliance, Inc. (WBA - Free Report) has set a major milestone to expand global footprint with its decision to acquire a 40% stake in Sinopharm Holding Guoda Drugstores Co., Ltd. (GuoDa), a subsidiary of China National Accord Medicines Corporation Ltd. On successful completion, this investment should provide a strong impetus to Walgreens’ worldwide retail pharmacy business.
Following this news, shares of Walgreens rose 1.24% to reach $71.05 on Dec 6.
Notably, Shanghai-based GuoDa is a large national pharmacy chain in China. It is the retail pharmacy platform of China National Pharmaceutical Group Corporation (CNPGC).
Financial Terms
This 40% minority stake in GuoDa will be purchased by Walgreens for through a capital increase of worth $416 million, subject to certain regulatory review and approval plus other customary closing conditions. Upon completion, Walgreens would account for this stake as an equity method investment.
China Retail Market at a Glance
Per a report by IBISWorld, revenues for the Pharmacy and Drugstore industry in China have been growing at an annualized rate of 16.6% over the past five years now. Per the report, substantial growth in demand for drugs in domestic retail purchase, relatively expensive drug prices in hospitals and increasing self-medication rate are major factors spurring this stupendous growth.
Prospects With GuoDa
Per Walgreens, GuoDa as China’s leading pharmacy chain is going to contribute to its global pharmacy expertise. Incidentally, Walgreens already has a strong base in China, courtesy of its merger with Alliance Boots. This latest development with GuoDa will further strengthen its business in this densely populated region. The company is particularly excited about its opportunity to invest in the country’s fast-growing retail pharmacy sector.
Share Price
Over the past three months, Walgreens has been trading above the broader industry. The stock has lost 12.7%, narrower than the industry’s 13.5% decline during this period.
Declining sales at the Retail Pharmacy International was a disappointment leading to a drop in the share price of the company in the recent past. We expect this to improve a little with the latest strategic decision by Walgreens.
PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 83.9% over a year.
Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 134.7% in a year.
Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has soared 94.9% in a year.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
Walgreens Boots Invests in China to Fortify Retail Pharmacy
Walgreens Boots Alliance, Inc. (WBA - Free Report) has set a major milestone to expand global footprint with its decision to acquire a 40% stake in Sinopharm Holding Guoda Drugstores Co., Ltd. (GuoDa), a subsidiary of China National Accord Medicines Corporation Ltd. On successful completion, this investment should provide a strong impetus to Walgreens’ worldwide retail pharmacy business.
Following this news, shares of Walgreens rose 1.24% to reach $71.05 on Dec 6.
Notably, Shanghai-based GuoDa is a large national pharmacy chain in China. It is the retail pharmacy platform of China National Pharmaceutical Group Corporation (CNPGC).
Financial Terms
This 40% minority stake in GuoDa will be purchased by Walgreens for through a capital increase of worth $416 million, subject to certain regulatory review and approval plus other customary closing conditions. Upon completion, Walgreens would account for this stake as an equity method investment.
China Retail Market at a Glance
Per a report by IBISWorld, revenues for the Pharmacy and Drugstore industry in China have been growing at an annualized rate of 16.6% over the past five years now. Per the report, substantial growth in demand for drugs in domestic retail purchase, relatively expensive drug prices in hospitals and increasing self-medication rate are major factors spurring this stupendous growth.
Prospects With GuoDa
Per Walgreens, GuoDa as China’s leading pharmacy chain is going to contribute to its global pharmacy expertise. Incidentally, Walgreens already has a strong base in China, courtesy of its merger with Alliance Boots. This latest development with GuoDa will further strengthen its business in this densely populated region. The company is particularly excited about its opportunity to invest in the country’s fast-growing retail pharmacy sector.
Share Price
Over the past three months, Walgreens has been trading above the broader industry. The stock has lost 12.7%, narrower than the industry’s 13.5% decline during this period.
Declining sales at the Retail Pharmacy International was a disappointment leading to a drop in the share price of the company in the recent past. We expect this to improve a little with the latest strategic decision by Walgreens.
Zacks Rank and Key Picks
Walgreens carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are PetMed Express, Inc. (PETS - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 83.9% over a year.
Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 134.7% in a year.
Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has soared 94.9% in a year.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>