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Walgreen Co
(WAG-NYSE)
SUMMARY
SUMMARY DATA
Risk Level *
Below Avg.,
Type of Stock Large-Blend
Industry Retail-Drug Str
Zacks Industry Rank * 40 out of 267
Current Recommendation
NEUTRAL

Prior Recommendation
Outperform
Date of Last Change
03/13/2011

Current Price (04/24/14)
$67.42
Target Price
$71.00
Walgreens reported a mixed second quarter fiscal 2014 with
adjusted earnings remaining below the Zacks Consensus
Estimate while revenues exceeding the mark. As expected,
Walgreens recorded improved revenues during the quarter
on plump prescription sales. The company returned to sales
growth with increasing return of Express Scripts customers
following the resolution of their earlier impasse. However,
sluggish front-end sales and difficult macroeconomic
conditions remained looming concerns. Nonetheless,
Walgreens gained a modest share in the retail pharmacy
market. The higher first-year synergy from the Alliance Boots
deal was another upside. We are also upbeat about the
long-term three-pronged-deal with AmerisourceBergen.
However, Walgreens strategy to win back earlier clients is
still to be proven. The competitive landscape also remains
tough. Accordingly, we remain Neutral on Walgreens.
52-Week High $69.09
52-Week Low $44.12
One-Year Return (%) 37.52
Beta 1.34
Average Daily Volume (sh) 6,221,896

Shares Outstanding (mil) 950
Market Capitalization ($mil) $64,061
Short Interest Ratio (days) 3.55
Institutional Ownership (%) 65
Insider Ownership (%) 8

Annual Cash Dividend $1.26
Dividend Yield (%) 1.87

5-Yr. Historical Growth Rates

Sales (%) 3.2
Earnings Per Share (%) 10.2
Dividend (%) 24.2

P/E using TTM EPS 21.0
P/E using 2014 Estimate 19.5
P/E using 2015 Estimate 17.3

Zacks Rank *: Short Term
1 3 months outlook 3 - Hold
* Definition / Disclosure on last page

ZACKS CONSENSUS ESTIMATES

Revenue Estimates
(In millions of $)
Q1 Q2 Q3 Q4 Year
(Nov) (Feb) (May) (Aug) (Aug)
2012 18,157 A 18,651 A 17,752 A 17,073 A 71,633 A
2013 17,316 A 18,647 A 18,313 A 17,941 A 72,217 A
2014 18,329 A 19,605 A 19,210 E 18,787 E 75,895 E
2015 19,107 E 20,310 E 80,526 E
Earnings Per Share Estimates
(EPS is operating earnings before non-recurring items, but including employee
stock options expenses)
Q1 Q2 Q3 Q4 Year
(Nov) (Feb) (May) (Aug) (Aug)
2012

$0.63 A $0.78 A $0.62 A $0.48 A $2.53 A
2013

$0.58 A $0.96 A $0.85 A $0.73 A $3.12 A
2014

$0.72 A $0.91 A $0.94 E $0.88 E $3.45 E
2015

$0.85 E $1.04 E $3.90 E
Note: Quarterly figures may not add up to the annual figure due to rounding off
Projected EPS Growth - Next 5 Years % 12

April 25, 2014

Equity Research WAG | Page 2

OVERVIEW
Headquartered in Deerfield, Ill., Walgreen Co. (WAG), popularly known as Walgreens, is the largest national
retail pharmacy chain in terms of revenue and profitability. As of Nov 30, 2013, Walgreens operated 8,681
locations in all 50 states, the District of Columbia, Puerto Rico and Guam and the U.S. Virgin Islands,
including 8,200 drugstores (142 more compared with the year-ago period). The company also operates
infusion and respiratory service facilities, worksite health and wellness centers, specialty pharmacies and
mail service facilities. Its Take Care Health Systems subsidiary manages more than 750 in-store convenient
care clinics and worksite health and wellness centers.
The drugstores, apart from selling prescription drugs, also sell over-the-counter (OTC) medications, general
merchandise, cosmetics, toiletries, household items and food and beverages. Due to carefully selected
locations, the stores offer easy accessibility with many of them remaining open for 24 hours. The company
ensures robust traffic in the stores by offering a broad selection of consumable merchandise backed by
strong advertising programs.
In Aug 2012, Walgreens entered into a strategic partnership with a global international pharmacy-led health
and beauty group Alliance Boots GmbH, in which it acquired a 45% stake for $6.7 billion. The company also
has the option to obtain 100% ownership over the next three years for an approximate value of $9.5 billion in
cash and stock.
Generic: The Current Scenario

The ongoing introduction of prescription drugs in the generic market is
changing the mode of patient care which affects the business of drug retailers like Walgreens. The generic
wave hampered Walgreens top-line in the past quarters. However, gross margin improved on account of
higher generic prescription drug sales. While the introduction of generics has notably dragged sales over the
last few quarters, the company expects the gross margin expansion to continue in the near term.
Management asserted that the generic wave should significantly increase Walgreens gross profit per script
compared to the gross margin which it earns on brands.
REASONS TO BUY

Prescription Drug Purchasing Front-Runner: Walgreens in its most recent effort to boost its market
presence, decided to focus on its supply chain performance. With this aim, on Mar 18, 2013, the company
along with Alliance Boots GmbH and AmerisourceBergen Corporation had announced various agreements
and arrangements. It inked a 10-year pharmaceutical distribution agreement with AmerisourceBergen,
effective Sep 1, 2013, to improve its global pharmaceutical supply chain for branded as well as generic
drugs. AmerisourceBergen has replaced Walgreens former pharmaceutical distributor Cardinal Health as
Walgreens contract with the latter had expired in Aug 2013. Earlier, AmerisourceBergen used to supply
specialty drugs to Walgreens. The company s three-pronged deal with AmerisourceBergen underlines a
strategic collaboration, equity alignment and distribution agreement. Apart from that, Walgreens entered into
an agreement which provides AmerisourceBergen the ability to access generics and related pharmaceutical
products through Walgreens Boots Alliance Development GmbH, a global sourcing joint venture between
Walgreens and Alliance Boots. While Walgreens is riding the generic wave, the deal augments its buying
capacity by a massive $3.5 billion. In calendar year 2014, AmerisourceBergen is expected to distribute
substantial levels of generic pharmaceutical products that are currently distributed by Walgreens. At present,
Walgreens is a step closer to exercising its right to purchase a minority stake in AmerisourceBergen
following the regulatory clearance. As of Feb 25, the company purchased 10.5 million shares of
AmerisourceBergen s stock and owned 4.5% of the company. Although the equity alignment is exercisable
up to 23%, Walgreens can obtain a maximum of 30% stake (maximum limit per agreement) in
AmerisourceBergen if the latter continues its share buyback activity. According to the company, the levels of
generic pharmaceuticals distributed by AmerisourceBergen will increase throughout 2014. We believe, the
contract between these three behemoths in their respective industries will build an incomparable global
Equity Research WAG | Page 3

platform in the retail or wholesale pharmacy industry. This will create a kingpin in the prescription drug
purchasing space helping Walgreens to better serve the U.S. and European healthcare systems along with
other growing markets globally. Walgreens is optimistic about the financial and operational benefits from the
AmerisourceBergen deal for fiscal 2014 with margin expansion and bottom-line accretion.

New Alignments to Boost Growth:

In Mar 2014, Walgreens formed collaboration with Lebhar-Friedman
Publishing to launch Discover Beauty Within, the first exclusive, beauty publication for mass retailer. The
publication is focused on providing Walgreens and Duane Reade store customers with timely editorial
content and valuable coupons on behalf of the retailers merchandising partners. In Jan 2014, Walgreens
entered into a clinical collaboration agreement with Centura Health, a leading health care network in the U.S.
to provide greater access to healthcare services. With the Affordable Care Act bringing millions of newly
insured patients into the health care system, the relationship aims to help address some of the needs and
challenges faced by both patients and caregivers. In September, Walgreens entered into a long-term
partnership with Theranos, Inc., under which the new lab testing service of the latter will be available
throughout the wide network of Walgreens pharmacies. As the largest retail pharmacy chain in the U.S. with
more than 8,100 neighborhood pharmacies, Walgreens is expected to bring Theranos service to consumers
nationwide. This service is currently available at Walgreens Palo Alto, California store. However, the
company has plans to expand later this year. In Oct 2013, Walgreens also entered into a clinical
collaboration with WellStar s Health System. As per the deal, the two companies will jointly provide
coordinated and expanded health care services, while improving access to enhanced, inexpensive care for
patients in the northwest Atlanta market. With the Affordable Care Act facilitating the entry of millions of new
patients into the healthcare system, the merger is expected to be beneficial for Walgreens going ahead. It
addresses the needs and challenges facing both patients and healthcare providers. These recent endeavors
are expected to create a competitive edge for the company in the fast-growing pharmacy retailing market.

Strong Focus on Immunization Market:

Walgreens continues to strive to expand in the high-growth
immunization market. It is currently the largest retail provider of flu immunizations in the U.S. In the last
fiscal, the company provided more than 8.5 million immunizations, significantly up from 6.7 million the prior
year. In the last reported quarter, the company witnessed a weak flu season compared to last year which
resulted in fewer cough, cold and flu related prescriptions, and lower sales of over-the-counter products
compared to the same period last year. However, it maintained meaningful promotional investments in daily
living business in the quarter. In addition, through the first half of the fiscal 2014, Walgreens had a strong
season for immunizations with a total of 8.6 million vaccines administered implying an increase of 11% year
over year. Besides, the company also continued to build non-flu immunization business. Currently,
Walgreens is the top retail provider of Zostavax, a vaccine for herpes zoster (shingles). This convinces us
about the strength of Walgreens and its tremendous potential to grow its share in the $7.4 billion market.
In this regard, in Feb 2014, Walgreens formed an alliance with the National Minority AIDS Council (NMAC) to
improve HIV treatment outcomes for African Americans living with HIV. This partnership will work to give
improved pharmacists training and expand access to the pneumococcal vaccination specifically indicated for
persons living with HIV as incidents of flu and pneumonia rise. Earlier in Jan 2014, reached its target to
donate the value of three million life-saving vaccines for children in developing countries, upon successful
completion of its immunizations campaign developed in partnership with the UN Foundation s Shot@Life
campaign.
Moreover, to cover a huge 1.1 million HIV market in the U.S., in December Walgreens formed an alliance
with the Centers for Disease Control and Prevention (CDC). Per the agreement, the company will develop a
HIV patient-centered care model. According to Walgreens, this will be done through a national project to
advance clinical integration and medication therapy management and will be helpful in improving HIV
prevention and treatment outcomes. According to the agreement, 700 HIV-specialized pharmacies and
specially trained Walgreens pharmacists with their lead medication care plans will provide data evaluation
and outcomes reporting to thousands of HIV positive project participants. Walgreens pharmacists will meet
Equity Research WAG | Page 4

these project participants directly and create care plans that focus on medication adherence and also
address other needs that include health education for added chronic conditions.

Strategic Steps to Drive Growth:

In order to stimulate customer demand amidst a challenging
macroeconomic scenario, Walgreens has been taking a number of strategic steps. This includes the launch
of customer loyalty program Balance Rewards in Sep 2012, which has recorded more than 100 million
registrations to date. With almost 80 million active members Walgreens claims this to be the largest retail
loyalty program in the industry. As per management, the Balance Rewards program has been generating
majority of the sales. Besides, in Oct 2013, the company launched its new Balance Financial Prepaid
MasterCard in Detroit, Milwaukee and Nashville. A nationwide card rollout is expected before year end and
additional financial services in 2014.
In the quarter, the company also progressed with its other strategic growth driver which is, creating a Well
Experience store. Notably, in 2011, Walgreens first introduced its Well Experience store format, which offers
a new, enhanced layout, a completely revamped pharmacy and health care experience and a number of new
product selections. Currently, Walgreens is successfully rolling out its Well Experience stores reaching a total
of 628 across the country.
The company is also on an acquisition spree. Subsequent to acquiring a 45% stake in Alliance Boots GmbH
for $6.7 billion, this leading retail pharmacy chain acquired a mid-South US-based regional drugstore chain
for $438 million. Further, in Sep 2013, Walgreen inked a definitive agreement to acquire certain assets of
privately owned regional pharmacy chain Kerr Drug, including 76 retail drugstores and specialty pharmacy
business. The company believes that the wholesale business of Alliance Boots should improve its supply-
chain performance. We believe that these steps will help expand its business in several key regions of the
nation. As per management, Walgreens partnership with Alliance Boots is yielding positive results, with
combined first half of fiscal 2014 synergies of $236 million. Moreover, the company expects second-year
combined synergy program in the range of $375-$425 million, an increase from the previous second-year
estimate of $350-$400 million. Moreover, the Alliance Boots deal was accretive by $0.08 to the EPS in the
last reported quarter, in line with its expectation. The deal is expected to contribute $0.13 to $0.14 per share
to adjusted earnings in the second quarter of fiscal 2014. As Walgreens strides on the synergy track, the
company expects to attain synergies of $350 $400 million across joint operations in fiscal 2014 and $1
billion by the end of 2016. This alliance is expected to form the world s first pharmacy-driven health and
wellbeing retail with more than 180,000 stores and distribution touch points in 26 countries. We are looking
forward to all these new ventures of Walgreens and expect it to add to the company s growth going forward.

Strong balance sheet:

Walgreens

cash and cash equivalent at the end of the second quarter, fiscal 2014
were almost $1.77 billion significantly lower than $2.4 billion as of Feb 28, 2013. Long-term debt was higher
at $4.49 billion in the reported quarter, compared with $5.1 billion as of Feb 28, 2013. Cash flow trends
continued to remain strong with the qurter s operating cash flow of $1.1 billion compared with $1.2 billion in
the same period last year. Free cash outflow in the quarter was $877 million versus inflow of $953 million a
year ago. The healthy cash balance should support the company s plans for suitable acquisitions, to drive its
revenues going forward. With a strong cash position, the company always strives to benefit its shareholders
through dividend payments and share repurchases. Walgreens strong balance sheet has enabled it to
consistently hike dividends. In July 2013, the company declared a 14.5% hike in its regular quarterly dividend
to $0.315 per share ($1.26 for fiscal 2013), in line with its long term dividend payout ratio of 30% to 35%. The
hike reflects a compound annual growth rate (CAGR) of 23% over 5 years. It is encouraging to note that the
company has been paying dividends for more than 80 years and the recent hike marks the thirty-eighth
consecutive quarter of dividend increase for the company. In the last fiscal, the company has returned more
than $1 billion to its shareholders via dividends. Walgreens envisages operating cash flow of $8 billion by
2016. The company plans to review its capital deployment strategy. Meanwhile, Walgreens will continue to
reward its shareholders with dividends as it boasts of a dividend growth track and share repurchase plans. In
Jul 2011, the board of the company authorized the stock buyback program to repurchase up to $2 billion of
its common stock through Dec 31, 2015. We note that in fiscal 2013, Walgreens did not repurchase any
Equity Research WAG | Page 5

shares under its current buyback program. Investors may look forward to rewards in the form of considerable
share repurchases. These efforts also underline the company s focus toward a healthy investment grade
rating.
REASONS TO SELL


Current Uncertainty: During Jan to mid-Sep 2012, Walgreens was not a part of the pharmacy provider
network of Express Scripts, which adversely affected its sales. As a result, the company suffered a
prolonged period of lean sales. Sales lagged expectations in the reported quarter despite being the third full
quarter to include the benefit from the return of Express Scripts customers. The company has been
struggling to post relatively strong sales. A possible explanation could be the loss of customers due to the
earlier impasse with Express Scripts. Despite the reconciliation with Express Scripts, Walgreens ability to
win back its previous customers remains a matter of concern. Per management, the lower-than-expected
front-end sales and unyielding macroeconomic conditions adversely affected the quarterly performance.
While we believed that the persistent lower-than-expected sales will be remedied through the resolution of
the impasse between Walgreens and Express Scripts, it is a time bound thing.

Competitive Landscape: Walgreens faces the headwinds of increased competition and tough industry
conditions. Even though the company continues to grab market share from other traditional drug store
retailers, major mass merchants such as Target and Wal-Mart are expanding their pharmacy businesses and
enjoy a fair market share. We note that retail wing of CVS Caremark witnessed a record market share gain
following the termination of the Walgreens-Express Scripts contract. Even with the resolution of the impasse,
CVS is optimistic about retaining at least 60% of the prescription volumes gained during the stalemate of the
stalwarts. While the company s sluggish performance is showing signs of improving with the return of
customers, CVS management commentary of retaining a majority of the client wins raises our concern.
There are also risks from other channels, such as supermarkets and mail order operations. In addition,
industry conditions remain challenging, as insurers reduce reimbursement rates and increase prescription
co-payments.



Source: Company Data (According to first quarter of fiscal 2013)

Additional Challenges:

Under the present weak macroeconomic environment, unemployment remains high
at 8.3%, and food and gas prices are on the rise. Increasing costs coupled with unemployment makes the
customers more value driven. Consequently, spending on discretionary items gets affected. We are of the
opinion that this situation will impact same store sales growth. Our proposition is supported by the continued
decline in customer traffic in comparable stores.
Equity Research WAG | Page 6

RECENT NEWS
Q2 Earnings Miss at Walgreens

Mar 25, 2014
Walgreens reported adjusted net earnings of $0.91 per share in the second quarter of fiscal 2014, down
5.2% from the year-ago adjusted net earnings. The adjusted earnings also remained below the Zacks
Consensus Estimate of $0.93. On a reported basis, earnings came in at $754 million or $0.78 per share,
down 0.2% or down 1.2% year over year, respectively.
Walgreens sales came in at $19,605 million in the quarter, up 5.1% year over year and marginally ahead of
the Zacks Consensus Estimate of $19,547 million.
Quarter in Detail
Front-end comparable store (those open for at least a year) sales and basket size grew 2.0% and 3.4%,
respectively, in the quarter. On the other hand, customer traffic in comparable stores was down 1.4%.
Overall, comparable store sales improved 4.3%.
Prescription sales (accounting for 62.2% of total sales in the quarter) climbed 7.0% over the prior-year
quarter, while prescription sales in comparable stores increased 5.8%. Moreover, Walgreens filled 214
million prescriptions (up 2.8% year over year) during the reported quarter.
Prescriptions filled at comparable stores rose 2.2%. As reported by IMS Health, Walgreens market share in
retail pharmacy improved 20 basis points (bps) to 19.0% at the end of Feb 2014.
The company s Balance Rewards loyalty program reached a milestone with approximately 100 million
enrollees and 80 million active members at the end of the second quarter.
Gross profit increased a mere 0.8% year over year to $5.65 billion. However, gross margin contracted 125
bps to 28.8% due to fewer new generic drugs introduction, a less severe flu season and soft margin in front-
end sales as the company made meaningful promotional investments to drive store traffic. The LIFO
provision was $51 million in this year s second quarter versus $72 million last year.
Selling, general and administrative (SG&A) expenses scaled up 1.6% to $4.6 billion. Operating margin
contracted 44 bps to 5.5%.
The company opened/acquired 28 stores in the reported quarter compared with 29 in the year-ago quarter.
As of Feb 28, 2014, the company operated in 8,681 locations in 50 states, the District of Columbia, Puerto
Rico and Guam and the U.S. Virgin Islands, including 8,210 drugstores (138 more compared with the year-
ago period). The company also operates worksite health and wellness centers, infusion and respiratory
service facilities, specialty pharmacies, mail service facilities, e-commerce business and Take Care Health
Systems.
Financial Condition
Walgreens exited the second quarter with cash and cash equivalents of $1.77 billion, significantly lower than
$2.4 billion as of Feb 28, 2013. Long-term debt was higher at $4.49 billion in the reported quarter, compared
with $5.1 billion as of Feb 28, 2013.
Moreover, the company has generated year-to-date operating cash flow of $1.47 billion in the quarter
compared with $1.17 billion in the same period last year.
Equity Research WAG | Page 7

Striding Ahead on Synergy Track
Walgreens partnership with Alliance Boots is yielding positive results, with combined first half of fiscal 2014
synergies of $236 million. In the second quarter, the Alliance Boots deal was accretive to adjusted earnings
by $0.08. The company estimates that accretion from Alliance Boots in the third quarter will be an adjusted
$0.13 to $0.14 per share. Moreover, the company expects second-year combined synergy program in the
range of $375-$425 million, an increase from the previous second-year estimate of $350-$400 million.
VALUATION
Walgreens reported a mixed fiscal second quarter with a bottom line miss and a marginal beat on the top-line
front. The generic wave in the pharmaceutical industry is still a threat to revenues. This is also reflected in
the company's quarterly sales figure.
Nevertheless, Walgreens is poised to generate higher profits from escalating sales of higher-margin generic
drugs. Besides, we believe that Walgreens financial strength and sizeable market share in retail pharmacy
should leverage the company s sales growth. Walgreens is also positioned on a healthy dividend growth
track. Further, the customer loyalty program is gaining traction as reflected in increasing registrations. This
should improve customer traffic for Walgreens.
Walgreens in its most recent effort to boost its market presence, decided to focus on supply chain
performance. We currently look forward to synergies from the Alliance Boots deal. The deal with
AmerisourceBergen, likely to create a leader in the generic and branded drug purchasing space, is another
major upside. Walgreens is optimistic about financial and operational benefits from the deal for fiscal 2014,
with margin expansion and bottom-line accretion. Evidently, management seems to have chalked out a
number of strategic initiatives to revive growth for the company.
However, Walgreens remains susceptible to macroeconomic headwinds. It also faces increased competition
and tough industry conditions. Notably, sliding customer traffic is another downside for Walgreens. The
tussle to gain market share against CVS Caremark is another cause of concern. As a result, we prefer to
remain on the sidelines at present and keep an eye on ongoing developments. We thus maintain our Neutral
recommendation on the stock with a target price of $71.00, which is based on 20.5x our fiscal 2014 earnings
estimate of $3.45.
Walgreens current trailing 12-month earnings multiple is 21.0x, compared with 18.4x for the S&P 500 and
Industry Average of 53.0x. Over the last five years, Walgreens shares have traded in a range of 11.4x to
21.2x trailing 12-month earnings.
Equity Research WAG | Page 8

Key Indicators

P/E
F1
P/E
F2
Est. 5-Yr
EPS Gr%
P/CF
(TTM)
P/E
(TTM)
P/E
5-Yr
High
(TTM)
P/E
5-Yr
Low
(TTM)
Walgreen Company (WAG)
19.5 17.3 12.0 14.9 21.0 21.2 11.4

Industry Average N/M 32.9 15.8 14.0 53.0 N/M 10.2
S&P 500 16.1 15.0 10.7 13.7 18.4 27.7 12.0

CVS Caremark corporation (CVS) 16.4 14.5 13.4 12.8 18.2 18.7 10.0
Rite Aid Corporation (RAD) 19.7 14.9 17.5 9.2 23.0 21.3 6.8
Herbalife Ltd. (HLF) 9.5 8.2 17.8 8.8 10.7 21.5 6.0
TTM is trailing 12 months; F1 is 2014 and F2 is 2015, CF is operating cash flow

P/B
Last
Qtr.
P/B
5-Yr High
P/B
5-Yr Low
ROE
(TTM)
D/E
Last Qtr.
Div Yield
Last Qtr.
EV/EBITDA
(TTM)
Walgreen Company
(WAG) 3.0 3.1 1.7 15.5 0.2 1.9 12.5

Industry Average
3.9 3.9 3.9 32.1 0.3 4.1 N/M
S&P 500
4.4 9.8 3.2 23.8

0.0

Equity Research WAG | Page 9

Earnings Surprise and Estimate Revision History

Equity Research WAG | Page 10

DISCLOSURES & DEFINITIONS
The analysts contributing to this report do not hold any shares of WAG. The EPS and revenue forecasts are the Zacks Consensus
estimates. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts personal
views as to the subject securities and issuers. Zacks certifies that no part of the analysts compensation was, is, or will be, directly or indirectly,
related to the specific recommendation or views expressed by the analyst in the report. Additional information on the securities mentioned in this
report is available upon request. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to
accuracy and does not purport to be complete. Because of individual objectives, the report should not be construed as advice designed to meet
the particular investment needs of any investor. Any opinions expressed herein are subject to change. This report is not to be construed as an
offer or the solicitation of an offer to buy or sell the securities herein mentioned. Zacks or its officers, employees or customers may have a
position long or short in the securities mentioned and buy or sell the securities from time to time. Zacks uses the following rating system for the
securities it covers. Outperform- Zacks expects that the subject company will outperform the broader U.S. equity market over the next six to
twelve months. Neutral- Zacks expects that the company will perform in line with the broader U.S. equity market over the next six to twelve
months. Underperform- Zacks expects the company will under perform the broader U.S. Equity market over the next six to twelve months. The
current distribution of Zacks Ratings is as follows on the 1013 companies covered: Outperform - 15.0%, Neutral - 78.2%, Underperform

6.4%.
Data is as of midnight on the business day immediately prior to this publication.
Our recommendation for each stock is closely linked to the Zacks Rank, which results from a proprietary quantitative model using trends in
earnings estimate revisions. This model is proven most effective for judging the timeliness of a stock over the next 1 to 3 months. The model
assigns each stock a rank from 1 through 5. Zacks Rank 1 = Strong Buy. Zacks Rank 2 = Buy. Zacks Rank 3 = Hold. Zacks Rank 4 = Sell. Zacks
Rank 5 = Strong Sell. We also provide a Zacks Industry Rank for each company which provides an idea of the near-term attractiveness of a
company s industry group. We have 264 industry groups in total. Thus, the Zacks Industry Rank is a number between 1 and 264. In terms of
investment attractiveness, the higher the rank the better. Historically, the top half of the industries has outperformed the general market. In
determining Risk Level, we rely on a proprietary quantitative model that divides the entire universe of stocks into five groups, based on each
stock s historical price volatility. The first group has stocks with the lowest values and are deemed Low Risk, while the 5
th
group has the highest
values and are designated High Risk. Designations of Below-Average Risk, Average Risk, and Above-Average Risk correspond to the
second, third, and fourth groups of stocks, respectively.
Analyst Urmimala Biswas
Copy Editor Anindita Sinha
Content Editor Urmimala Biswas
Lead Analyst Urmimala Biswas
QCA Souvik Guha
Reason for Update Earnings