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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 $7.8 billion, Walgreens operates through the U.S. Retail Pharmacy, International, and U.S. Healthcare segments. It serves millions of customers and patients in thousands of locations across the U.S., Europe, and Latin America. The pharmaceutical retailer is expected to release its Q4 and full-year earnings before the market opens on Tuesday, Oct. 15.
Ahead of the event, analysts expect Walgreens to report a profit of $0.36 per share for Q4, down 46.3% from $0.67 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates twice over the past four quarters while missing the estimate on two other occasions. Its adjusted EPS for the last reported quarter declined 37% year-over-year to $0.63, missing the consensus estimates by 6%.
For fiscal 2024, analysts expect Walgreens to report an adjusted EPS of $2.86, down 28.1% from $3.98 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to further decline 38.1% year-over-year to $1.77.
Shares of Walgreens have plummeted 65.7% in 2024, substantially lagging behind the S&P 500 Index’s ($SPX) 20.8% gains and the Health Care Select Sector SPDR Fund’s (XLV) 12.9% returns on a YTD basis.
Walgreens experienced a significant 22.2% plunge in its stock price on June 27 after the release of its Q3 earnings report. Despite a 2.6% year-over-year sales increase to $36.4 billion, and a slight uptick in profitability compared to the year-ago quarter, the company's adjusted EPS fell short of Wall Street's expectations. Compounding the issue, Walgreens reported an aggregated net loss attributable to shareholders of $5.6 billion for the past three quarters, a stark increase from the $2.9 billion loss reported during the same period last fiscal year.
The stock fell further 9% on Aug. 27 after Pfizer's (PFE) announcement of launching a direct-to-consumer telehealth and e-commerce platform. The move by Pfizer is expected to intensify competition in an already fiercely competitive market, potentially squeezing Walgreens' margins even further as it battles against e-commerce players.
The consensus opinion on the WBA stock is neutral, with an overall “Hold” rating. Out of the 15 analysts covering the stock, two suggest “Strong Buy,” 10 recommend “Hold,” one advises “Moderate Sell,” and two advocate a “Strong Sell” rating.
The mean price target of $11.73 suggests a potential upside of 30.9% 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.
