Pharmacy stocks got a lift in trading Monday after CNBC reported Amazon is backing off of selling drugs to hospitals.
Critics indicate that the pharmacy chain could do a better job revamping its stores on its own.
Drug store chain Walgreens appears to be a bargain given its P/E ratio of 18.07 and dividend yield of 2.45%.
The move could spur a price war, pressuring margins at rivals CVS, Walgreens and Rite Aid.
Albertson and Rite Aid are inking a deal in an effort to push back the likes of Amazon and Walmart.
Rite Aid is not a profitable company, so it does not have a P/E ratio, but it trades at $1 to $3 per share as an "option on survival."
Amazon shares have rallied nearly 60% this year, but the stock appears increasingly overbought on a technical level.
Cowen makes the case as to why Amazon should acquire Rite Aid as it eyes the pharmaceutical market.
Pharmacy shares tumbled after a report indicated that Amazon might now be able to start selling prescription drugs online.
Analysts foresee major PBMs either partnering, being bought out, or falling at the will of AMZN.