) to overweight from equal-weight.
Analyst Meredith Adler says Walgreen should be the core holding for many investors, and sees an attractive entry point. She calls Walgreen one of best-managed retailers in the U.S., and believes it is poised to reaccelerate growth after several years of dampened perfomance due to a pharmacist shortage, transitions in managment and a weak economy. Adler sees $1.15 fiscal 2003 (Aug.) earnings per share, and bumped up her $1.34 fiscal 2004 estimate to $1.36, which represents strong 19% growth in earnings per share.
Adler also thinks Walgreen will use its free-cash flow to accelerate square footage growth within the next 18 months, as well as buy back shares. She has a $39 target.