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Risk-to-Price Commentary: Lorillard Tobacco Company And Walgreen Co. Sep 10
Standard & Poors, Sep 2010
Abstract
With record sales of $16.9 billion, Walgreen Co. reported an 11.4% increase in fiscal fourth-quarter earnings per share Tuesday. Shares in Walgreen climbed more than 12% in intraday dealings Tuesday. Citing a strong operating performance, including a 6.5% jump in prescription sales, and cost control, Walgreen said it earned $0.49 per share compared with the year-ago period's $0.44. Analysts polled by Capital IQ expected Walgreen to earn $0.45 per share, on average. The consensus predicts double-digit earnings growth each year from 2011 to 2013 (see chart 1). The Standard & Poor's Valuation and Risk Strategies (VRS) research team wondered whether the Risk-to-Price (R2P) scores on Walgreen's debt reflected this optimistic earnings outlook. Our R2P search, which specified noncallable bonds issued...
Companies mentioned in this report are: McCormick & Co. Inc.,Nabisco Inc.,RJ Reynolds Tobacco Holdings Inc.,Walgreen Co.,Altria Group Inc.,UST Inc.,E.S.O.P. & E.S.O.T. of Procter & Gamble,Coca-Cola Amatil Ltd.,Corn Products International Inc.,Cadbury Schweppes U.S. Finance LLC,Reynolds American Inc.,Lorillard Tobacco Co.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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