Primary-care provider VillageMD is considering an opportunity to merge with healthcare network Summit Health, according to Bloomberg which cited people familiar with the matter. Walgreens Boots Alliance (NASDAQ:WBA), which holds a majority stake in VillageMD, is looking to strengthen its competitive position in the healthcare industry as rivals step up their game.
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The merger with CityMD-parent Summit Health will expand VillageMD’s presence in more than 370 locations in New Jersey, New York, Connecticut, Pennsylvania, and Oregon. The merger could push Walgreens deeper into the primary healthcare market, which is necessary now as CVS Health (NYSE:CVS) and Amazon (NASDAQ:AMZN) are both planning to make major acquisitions to strengthen their footing in the industry.
The reported merger plan with Summit Health comes roughly a year after Walgreens increased its stake in VillageMD from 30% to 63% by pulling in an additional $5.2 billion into the company. If the merger materializes, the value of the combined company could range between $5 billion and $10 billion.
Is WBA Stock a Buy?
Over the past three months, seven Wall Street analysts have given a Hold rating to Walgreens stock, whereas one analyst has a Sell rating, bringing the consensus rating to Hold. The average price target on WBA stock is $37.57, indicating an upside of 2.7%.
Moreover, there was a 2.9% increase in portfolios holding Walgreens stock by investors on TipRanks, over the past 30 days. This indicates a Positive sentiment of investors toward the WBA stock.
