Walgreens Partners with Google’s Wing for Drone Delivery Service

Walgreens Boots Alliance (WBA) is teaming up with Alphabet’s (GOOGL) drone delivery unit Wing to enable drone delivery services in densely populated areas across the U.S. Wing will stage delivery drones at the retailer’s locations to fly packages to customers. WBA shares rose 0.79% to close at $48.39 on October 20.

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The drone delivery service should allow Walgreen stores across the country to deploy small dedicated fleets from parking lots, rooftops, and small spaces to deliver packages. By leveraging Wing’s drones, Walgreen becomes the first retailer to launch such an approach for delivering items to customers.

Until now, drone delivery services have mostly been limited to smaller towns where land usage is less crowded. Unveiling the service in densely populated towns and cities is a massive step for Walgreens to enhance the delivery of its products.

Wing will facilitate the first drone delivery service that will take place in the Dallas-Fort Worth area from the parking lot of one of Walgreens’ stores. The service will serve customers in the greater part of the city of Frisco and the town of Little Elm.

The launch of the Wing-powered drone delivery service in Dallas comes on the heels of Walgreens conducting test flights since June from a testing facility in Fort Worth. Plans are underway to launch a commercial service. (See Top Smart Score Stocks on TipRanks)

Meanwhile, Truist Financial analyst David S MacDonald has reiterated a Hold rating on the stock and raised the price target to $56 from $52, implying 15.73% upside potential to current levels.

According to the analyst, a strategic push deeper into healthcare with the launch of Walgreens Health should accelerate the company’s long-term growth potential.

Consensus among analysts is a Hold based on 1 Buy and 4 Holds. The average Walgreens price target of $55 implies 13.66% upside potential to current levels.