walgreens boots alliance inc has turned its focus to a consumer healthcare business strategy that could lead to pharmacy retail location closures according to credit suisse along with its fiscal fourthquarter results walgreens wba recently announced that has invested 52 billion in villagemd a primary healthcare company to bring its stake in the company to 63 invested a further 970 million to take a 71 stake in shields a specialty pharmacy company and made a 330 million investment for a 55 in carecentrix a home healthcare company taken together the investments mark the launch of walgreens health and are expected to drive longterm earningspershare growth of 11 to 13 see 19 states offered milliondollar lotteries to increase covid vaccination rates this research says they didn’t work “this is a new segment within our business that will focus on bringing together our healthcare ambitions and powering up our new and existing assets to support the journey” said roz brewer the former starbucks corp sbux executive who was announced as the new walgreens chief executive in january during the investor event according to factset to bring this vision of multiplatform healthcare to physical locations and online through an app and other channels analysts say the company will have to close some stores “given the fairly significant investments walgreens is making over the coming years the company is looking to possibly close additional us stores albeit less than the number of closures will be less than the previous rationalization program 125 locations now compared to 250 in the prior program” credit suisse analysts led by aj rise wrote “further walgreens will look to possibly close some uk locations as well” in the us the company aims for longterm sales growth of 35 to 4 with pharmacy growth of 45 and frontofstore retail growth of about 2 also the success of merck’s antiviral and other covid19 pills in development may depend on how quickly people start taking them in postevent comments walgreens told credit suisse the company discussed changes to its footprint it has already added 40 walgreens health corners spaces in stores that include a tech bar and a private health room “when thinking about the 2 number in today’s traditional walgreens store an average store is 14000 square feet the stock room is 2000 square feet” walgreens management said “the stock room probably doesn’t need to be 2000 square feet and we can leverage some of the space there will be some square footage loss with villagemd and we will look to remove lower turnoverprofit stockkeeping units skus and increase in health and wellness” “while we view this announcement as positive we view it as more of a defensive move than offensive move given the competitive landscape has changed around walgreens over the last few years” wrote mizuho analysts “as a result we would not expect meaningful share price appreciation until successful execution on its strategy becomes evident” don’t miss fda committee says it’s safe for all adults who got jj’s covid19 vaccine to get a booster “while there is plenty of work to do we think the deeper push into healthcare meaningfully increases walgreen’s potential total addressable market brings the company into highergrowth and highermargin businesses improves diversification drives potential synergies with the base pharmacy business and improves positioning to benefit from overarching sector tailwinds” wrote truist analysts in a note walgreens stock is up 204 for the year to date edging past the sp 500 index spx increase of 203 for the period