Shares of Walgreens fell by about 4 percent in morning trading Friday. They're up by about 9 percent this year.
The drugstore chain has struck numerous partnerships, including with health insurer Humana, diagnostics company LabCorp, grocery chain Kroger, package delivery company FedEx and telecom giant Sprint. These are all aimed at boosting traffic to Walgreens' drugstores, which have watched visits decline as people shop online more.
Goldman analyst Robert Jones said he doesn't think these partnerships, even if expanded, will help enough to offset declines in Walgreens' core retail pharmacy business, according to a research note sent to clients Friday. Jones downgraded Walgreens to "sell" from "hold" Friday.
Sells are still somewhat rare on Wall Street. Jones is the only analyst with a sell rating on Walgreens, which has three buys and eight holds, according to TipRanks.
Skepticism about Walgreens' business has intensified this year. Rival drugstore CVS Health completed its $70 billion acquisition of health insurer Aetna. Amazon entered the prescription drug delivery business this summer when it bought online pharmacy PillPack, spooking investors who sent drugstore stocks tumbling.
Walgreens has discussed a possible deal with Humana, the "Wall Street Journal" reported last month, citing people familiar with the matter. However, Jones worries Walgreens' current leverage and debt levels could limit the size of a deal Walgreens could make.
Meanwhile, leaders from both political parties, including President Donald Trump, have vowed to lower prescription drug prices. Jones estimates brand inflation could equal half the rate of 2018, which would spell trouble for retailers who he says could face increased reimbursement pressure.