An expected sales lift from a particularly virulent flu season still doesn’t remove a layer of uncertainty over how regulatory issues will affect Shoppers Drug Mart Corp.
Analyst Irene Nattel of RBC Capital Markets lowered her target to $52 from $56, noting investors are cautious about potential changes to government regulations on prescription drugs in Ontario.
“Equity investors seem to be discounting a fairly negative outcome to the current situation in Ontario despite the underlying 8% unit growth rate for the Canadian Rx segment,” she wrote in a note to clients.
Ms. Nattel also shaved her per-share earnings estimate to 80¢ from 85¢ for the fourth quarter, which the drug retailer is set to report on Thursday. The current share price still “represents an attractive entry point” for investors, she said.