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Walgreens Partners With VillageMD to Offer Primary Healthcare

Zacks Equity Research

Walgreens Boots Alliance Inc. WBA recently announced a tie-up with VillageMD to provide primary healthcare services to adult patient communities in the Houston area. This joint venture marks Walgreens’ commitment toward enabling better access to affordable healthcare and creating neighborhood health destinations.

Walgreens is one of the most renowned drugstore chains of the United States, whereas VillageMD is a key healthcare provider for organizations which are shifting to a primary care-oriented, high-value clinical model.

More About the Collaboration

As part of the venture, VillageMD will operate high-tech primary care centers next to five Walgreens stores in the Houston area. The first few clinics are slated to open by the end of 2019. The suitably-located clinics, named ‘Village Medical at Walgreens’, will offer inclusive primary healthcare facilities, pharmacists, nurses and social workers to cater to a wide range of patient needs.

Patients at these clinics will receive the benefits of VillageMD’s patent-pending docOS system, which combines data and technology to offer the best quality of healthcare. The docOS system identifies diagnostic discrepancies, thereby allowing doctors and patients to manage chronic conditions more efficiently.

The companies plan to focus on the expansion of the ‘Village Medical at Walgreens’ chain of primary care clinics within Houston and other markets.

Recent Collaborations by Walgreens

Of late, Walgreens has been expanding its base by initiating several partnerships.

In February, Walgreens announced an agreement collaboration with Alipay, the world’s leading digital payment platform, operated by Ant Financial Services Group. With the partnership, Alipay’s mobile payment platform will reach thousands of Walgreens locations throughout the United States.

In January, Walgreens had entered into a partnership with Microsoft Corp. to develop health care delivery models, technology and retail innovation. The companies will combine the power of Microsoft Azure, Microsoft’s cloud and Artificial Intelligence platform, health care investments, and new retail solutions with Walgreens’ customer reach, convenient locations, outpatient health care services and industry expertise to deliver more personalized, affordable and accessible healthcare.

Price Performance

Over the past year, Walgreens has underperformed the industry it belongs to. The stock has lost 14.8% compared with the industry’s 13% decline.

Zacks Ranks and Key Picks

Walgreens currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are Stryker Corporation SYK, Penumbra, Inc. PEN and Amedisys, Inc AMED. Notably, each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth rate is projected at 10%

Penumbra’s long-term earnings growth rate is estimated at 20.9%.

Amedisys’s long-term earnings growth rate is expected at 19.7%.

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