- Walgreens is trading at a discount to its intrinsic value - there's still a lot of value in a brick-and-mortar chain that generates huge free cash flows.
- Fears of high leverage, growth concerns, and competition from Amazon are overblown.
- Amazon won't be able to disrupt the pharmaceutical industry anytime soon - it will be tough to offer truly lower prices than competitors, plus mail orders are unpopular.
- Walgreens spends money in a shareholder-friendly way - they've ramped up share buybacks, and they've steadily increased dividends for 46 years.
- I estimate WBA has a fair value of about $75 today, which means there's about 60% upside and double-digit annual returns at current prices.
For further details see:
Walgreens: Cheap Today Because Of Overblown Amazon Fears