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Deerfield, Illinois-based Walgreens Boots Alliance, Inc. (WBA), is an integrated healthcare, pharmacy, and retail company. With a market cap of $8.2 billion, Walgreens operates through the U.S. Retail Pharmacy, International, and U.S. Healthcare segments.
Companies worth $2 billion or more are generally described as "mid-cap stocks," Walgreens fits right into that category, with its market cap exceeding this threshold, reflecting its notable size and influence in the pharmaceutical retailers' industry. It serves millions of customers and patients in thousands of locations across the U.S., Europe, and Latin America.
Despite its notable strengths, WBA stock has tanked 65.6% from its 52-week high of $27.05 touched on Jan. 2. However, the stock has gained 8.6% over the past three months, outpacing the SPDR S&P Retail ETF’s (XRT) 4.7% gains during the same time frame.
Over the longer term, Walgreens’ performance has remained dismal. WBA has plummeted 41.8% over the past six months and 64.5% over the past 52 weeks, significantly underperforming XRT’s 5.8% surge over the past six months and 11.2% returns over the past year.
To confirm the bearish trend, WBA has remained consistently below its 200-day moving average over the past year and mostly below its 50-day moving average since mid-January with some fluctuations lately.
Walgreens’ stock soared 15.8% after the release of its Q4 results on Oct. 15 as its adjusted non-GAAP EPS of $0.39 surpassed Wall Street’s expectations by 8.3%. Meanwhile, its sales grew nearly 6% year-over-year to $37.5 billion which surpassed analysts’ estimates by 5.1%. However, the company has continued to observe a drop in profitability due to fierce competition from e-commerce players which has narrowed its margins. Its adjusted net earnings for the quarter dropped 40.9% year-over-year to $340 million which represents a minuscule adjusted net margin of 90 basis points.
WBA stock further surged 17.7% on Dec. 10 after The Wall Street Journal reported the drugstore giant is in talks with private equity firm Sycamore Partners to take itself private.
Walgreens has lagged behind its peer CVS Health Corporation’s (CVS) 28.1% decline over the past six months and 44% drop over the past year.
Despite the recent surge in Walgreens’ stock prices, analysts remain cautious about the stock prospect. Among the 15 analysts covering the WBA stock, the consensus rating is a “Hold.” Its mean price target of $9.87 represents a 6.1% premium to current price levels.
