Analyze: Walgreen (WAG)

A day after reaching its biggest deal ever, Walgreen (WAG) found itself under pressure as Wall Street analysts questioned the price, timing and necessity of a transformative deal, and the company's shares fell sharply.
The Deerfield, Ill., company plans to buy nearly half of Alliance Boots GmbH for $6.7 billion. Walgreen will also hold an option to swallow the rest of the European pharmacy operator in almost three years.

Walgreen's stock fell 2.9% to $29.21 a share Wednesday on top of its 5.9% slide Tuesday as the stock hit its lowest point since September 2010.

Among the concerns analysts raised Wednesday: an expensive purchase price; the use of Walgreen shares already well off their highs; the distraction for a company that already faces headaches at home; and an increase in exposure to the troubled European economy.

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Meanwhile, KKR & Co. (KKR)is being lauded for the deal. The private-equity firm's stock rose 6.8% Tuesday in one of its best days since it began trading on the New York Stock Exchange in 2010. Wednesday, it gained 2.1% to $12.74.

Analyze: Groupon (GRPN)

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Groupon stock bounces on analyst upgrade

(AP) — Shares of Groupon Inc. got a boost Monday after a Morgan Stanley analyst upgraded the online deals company, saying it has gotten better at personalizing offers for users.

THE SPARK: Analyst Scott Devitt upgraded Groupon to "Overweight" from "Equal Weight" after the recent sell-off in its stock. Shares had dropped about 44 percent over the past three months.

He said customers are buying more deals in the U.S. because the company has improved the customization of pitches to subscribers, lifting revenue, while Groupon has also cut marketing expenses by about 50 percent from a year ago.

He expects Groupon to extend these improved systems to its international markets, which are responsible for about 60 percent of total revenue.

THE BIG PICTURE: Groupon makes money by selling online deals for spas, restaurants and weekend getaways. Though it recently reported a good quarter, its stock has been battered due to a series of missteps with its finances. In March, the company restated its quarterly financial results, explaining that it lost more than it initially reported because it had to pay out more refunds than expected. In May, it replaced two of its board members to add executives with more accounting experience.

THE ANALYSIS: Devitt said that the company had been gaining while competitors lost some ground.

"We believe Groupon and daily deals are here to stay," Devitt wrote in a note to investors. "The competitive landscape, however, has shifted. The daily deal or Groupon clones have become less relevant."

Devitt said that while competitors such as LivingSocial, Amazon.com Inc.'s Amazon Local and Google Inc.'s Offers have continued to grow, they have not made a significant difference to the daily deals industry, which Groupon created.

He has a target price of $18 on Groupon.

SHARE ACTION: Chicago-based Groupon's stock rose 98 cents, or 10 percent, to $11.04 in afternoon trading. But it remains far off its initial public stock offering price of $20 from November. Shares have ranged from $8.80 and $31.14 since then.

Shoe retailer DSW (NYSE:DSW) tumbles 12%

Shoe retailer DSW Inc. (DSW, $51.94, -$6.86, -11.67%) projected a weak fiscal second quarter, pointing to increased clearance-priced sales as well as costs tied to expansion plans. Shares tumbled on the downbeat report, while also dragging down shoe sector peers Steven Madden Ltd. (SHOO, $35.56, -$2.50, -6.57%) and Genesco Inc. (GCO, $61.61, -$1.08, -1.72%).

The company’s earnings forecast fiscal second-quarter came well below analysts’ estimates. The company projects to earn 60 cents and 64 cents per share for the period ending July 31, compared with analysts’ target of 75 cents a share. However, the company continued to project fiscal 2012 adjusted earnings of $3.25 to $3.40 per share.