Big Calls of the Day: Morgan Stanley Likes Walgreen

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of drugstore operator Walgreen (NYSE: WAG  ) climbed 2% today after Morgan Stanley upgraded the stock to overweight from equal weight.  

So what: Along with the upgrade, Morgan Stanley planted a seemingly lofty price target of $70 on the shares, representing 26% worth of upside to Friday's close. Morgan cited bolstered growth prospects and significant cost synergies gained from Walgreen's looming deal with Swiss health and beauty company Alliance Boots, giving investors plenty of good vibes over Walgreen's profitability going forward.

Now what: Walgreen's plan to acquire 100% of Alliance in three years seems to be well on track. "Following last year's announcement of our strategic partnership, Alliance Boots and Walgreens have already made good progress in paving the way for the creation of the first global health and wellbeing enterprise," said Alliance Boots Chairman Stefano Pessina in a statement last month. Of course, with Walgreen shares hitting yet another 52-week high today and trading at a 25-plus P/E, much of those synergies might already be baked into the valuation.

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