/Walgreens%20Boots%20Alliance%20Inc%20phone%20and%20site-%20by%20T_Schneider%20via%20Shutterstock.jpg)
Deerfield, Illinois-based Walgreens Boots Alliance, Inc. (WBA), with a market cap of $9.9 billion, is an integrated healthcare, pharmacy, and retail company operating through U.S. Retail Pharmacy, International, and U.S. Healthcare segments. It serves millions of customers and patients in approximately 12,500 locations across the U.S., Europe, and Latin America. It has a presence in eight countries through its consumer brands: Walgreens, Boots, Duane Reade, the No7 Beauty Company, and Benavides in Mexico.
The stock has significantly underperformed the broader market over the past year. Shares of Walgreens Boots Alliance have dipped 62.6% over the past 52 weeks, while the S&P 500 Index ($SPX) has rallied 18.5% over the same time frame. In 2024 alone, WBA declined 56%, while the $SPX returned 12.1% on a YTD basis.
Zooming in further, WBA is also trailing behind the S&P 500 Healthcare Sector SPDR’s (XLV) 13% gains over the past 52 weeks and 10.6% returns in 2024.
Walgreens stock fell by a massive 22.2% on June 27 and hit a 27-year low after the release of its Q3 earnings. The company reported a 36.6% quarterly decline in EPS while missing the consensus estimates by 6%. It also lowered its EPS guidance for the current fiscal year due to challenging industry trends and a worse-than-expected U.S. consumer environment. Additionally, it is facing intense competition from e-commerce players, which has led to a steep decline in its margins.
For the current fiscal year, ending August, analysts expect Walgreens to report an EPS decline of 27.9% to $2.87 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the past four quarters while missing the projections on two other occasions.
Among the 15 analysts covering the stock, the consensus rating is a “Hold.” That’s based on two “Strong Buy” ratings, ten “Holds,” one “Moderate Sell,” and two “Strong Sell” ratings.
This configuration has been consistent over the past months.
In July, UBS Group (UBS) analyst Kevin Caliendo maintained a “Hold” rating and lowered the price target from $17 to $12.
The mean target price of $13 represents a premium of 13.2% to current price levels. However, the Street-high target of $22 indicates a potential upside of 91.6% from current price levels.
On the date of publication, Aditya Sarawgi 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.
