There are too many question marks surrounding Walgreens after the company released its latest quarterly numbers, Baird said Friday. The company on Thursday morning reported fiscal second-quarter earnings beating Wall Street estimates, but shares fell during the day as investors worried pandemic-related demand is fading. Walgreens also did not raise its forecast for the year. This led Baird to downgrade the stock to neutral from outperform and cut its price target on the stock to $51 per share from $70. The new projection implies 13.9% upside from Thursday's close. "Despite a positive long-term bias, WBA is simply too complicated at present. We remain committed believers that WBA is taking appropriate steps for a better future. However, this is not a tape that pays for level of difficulty or long-term aspirations. Anything short of crisp communications will not suffice," Baird's Eric Coldwell said in a note. Walgreens in its quarterly report also cautioned it will take time for its hefty health-care investments to pay off. The company is turning itself into a more health-care oriented company , including opening hundreds of doctor's offices, remodeling stores and hiring more medical staff. "Management remains confident and broadly communicating no deviation from long-term plans, while suggesting FY2H is a combination of conservative, accelerating spend given 1H upside cushion, and noting certain expenses and headwinds are transitory. However, there is no guidance and there are many unknowns ahead," Coldwell said. Walgreens is down 14.2% this year, underperforming the S & P 500's roughly 5% decline. —CNBC's Michael Bloom and Melissa Repko contributed reporting.
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There are too many question marks surrounding Walgreens after