What happened
You can't keep a good stock down, and on Friday it was abundantly clear that scores of investors consider Walgreens Boots Alliance (WBA -0.84%) to be a good stock. A day after getting dinged for a quarterly-earnings report many felt was sub-par, Walgreens' shares motored 4% higher on Friday. That beat the S&P 500 index's 2%-plus bull run.
So what
Much of this was a "that wasn't so bad, really" reassessment of Walgreens' first quarter of fiscal 2023 results, which were unveiled Thursday morning.
By late in the trading day, the stock had taken a nearly 8% hit to its price. Investors fretted about the company's year-over-year sales decline for the period and its lackluster guidance for the full fiscal year (although it made a slight upward adjustment to its revenue projection). Management also admitted that it would abandon its recent strategy of growing by acquisitions.
As is typical when a company delivers a less-than-inspiring quarter, several analysts became more bearish -- albeit slightly -- on Walgreens' prospects following the earnings release.
On Thursday, Evercore ISI's Elizabeth Anderson lowered her price target on the healthcare stock to $36 per share from the previous $40, while maintaining an in-line (read: neutral) recommendation. The following day her peers A.J. Rice at Credit Suisse and JPMorgan Chase's Lisa Gill followed suit. Both previously pegged the stock at being fairly priced at $42 per share. Rice cut this to $41, while Gill went $1 further to $40.
Now what
Markets often overreact in the moment, and that seems to have been the case with Walgreens on Thursday. That set of earnings wasn't one for the ages, to be sure, but it didn't deserve the sell-off it engendered. The investor "correction" on Friday was entirely understandable.
