Walgreens Boots Alliance, Inc. (WBA), with a market cap of $15.8 billion, is a healthcare and retail company that offers prescription drugs, health services, beauty products, and general merchandise globally. Based in Deerfield, Illinois, it serves customers through retail drugstores and online channels.
Shares of the drugstore chain have significantly underperformed the broader market over the past 52 weeks. WBA has declined 40.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27.2%. In 2024, WBA stock is down 29.7%, compared to SPX's 10% gains on a YTD basis.
Zooming in further, WBA also lagged behind the S&P 500 Cons Staples Sector SPDR's (XLP) marginal gains over the past 52 weeks and a 7.3% YTD increase.
WBA's subdued performance relative to broader indexes over the past year can be attributed to a dividend cut, low pharmacy reimbursement rates, an unsteady push into healthcare, a challenging macroeconomic environment, and declining demand for COVID-19 vaccines and tests. However, on March 28, WBA stock outpaced the market, driven by higher-than-expected Q2 revenue and earnings and its emphasis on cost-saving strategies. Also, the prospect of divesting its U.K. pharmacy chain, Boots, resulted in a more than 5% stock surge on May 13, aiming to address the financial struggles.
For the current fiscal year, ending in August, analysts expect WBA’s EPS to decline by 18.8% to $3.23 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing on two other occasions.
Among the 15 analysts covering the stock, the consensus rating is a “Hold.” That’s based on two “Strong Buys,” 10 “Holds,” one “Moderate Sell,” and two “Strong Sell” ratings.
This configuration has been consistent over the past months.
On May 14, TD Cowen analyst Charles Rhyee maintained a "Buy" rating on the WBA stock, reaffirming the price target of $35, which is also the Street-high target price. That implies an expected upside of 90.7% from current levels.
The mean price target of $22.86 represents a premium of around 24.6% to WBA's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
