Walgreens Boots Alliance (WBA) has demonstrated a modest gain in the recent trading session, closing at $10.92, which represents a 0.92% increase from the previous day’s closing price. This performance outpaced the broader S&P 500, which saw a daily gain of 0.2%. The Dow Jones Industrial Average and the technology-focused Nasdaq also saw gains, rising 0.24% and 0.21% respectively.
However, despite this recent uptick, Walgreens Boots Alliance has struggled over the past month. The stock has declined by 4.75%, underperforming compared to the Retail-Wholesale sector, which has lost 1.25%, and the S&P 500, which has decreased by 1.49% during the same period. This underperformance has raised concerns among investors and analysts alike.
Looking ahead, the company is preparing to release its earnings report, which is highly anticipated by the investment community. Analysts are projecting that Walgreens Boots Alliance will report earnings per share (EPS) of $0.36, reflecting a significant 46.27% decline compared to the same quarter last year. On the revenue front, forecasts suggest a modest growth to $35.81 billion, which represents a 1.1% increase from the previous year’s figures.
For the full fiscal year, the Zacks Consensus Estimates project earnings of $2.87 per share, marking a considerable decrease of 27.89% from the prior year. Revenue is expected to reach $145.92 billion, indicating a 4.92% increase year-over-year. These projections highlight the challenging environment Walgreens Boots Alliance is operating in, as well as the broader industry trends impacting its performance.
Recent changes to analyst estimates for Walgreens Boots Alliance provide additional insight into investor sentiment. Such revisions reflect short-term business trends and can significantly impact stock performance. Despite no recent changes in the EPS estimates, the company currently holds a Zacks Rank of #5, which is classified as a “Strong Sell.” This rating suggests a negative outlook based on the Zacks Rank system, which assesses stocks from #1 (Strong Buy) to #5 (Strong Sell). The Zacks Rank system has a strong track record, with #1 ranked stocks delivering an average annual return of +25% since 1988.
In terms of valuation, Walgreens Boots Alliance is trading at a Forward P/E ratio of 3.78, indicating a significant discount compared to its industry’s Forward P/E ratio of 8.73. Additionally, the stock has a PEG ratio of 0.76, which is slightly below the industry average PEG ratio of 0.78. The PEG ratio adjusts the P/E ratio by considering the company’s expected earnings growth rate, offering a more nuanced view of valuation.
The Retail – Pharmacies and Drug Stores industry, to which Walgreens Boots Alliance belongs, is currently ranked 250 out of more than 250 industries in the Zacks Industry Rank. This places it in the bottom 2% of all industries, reflecting a challenging environment for companies in this sector.
Overall, while Walgreens Boots Alliance has shown some positive movement recently, the company faces significant challenges and negative sentiment in the market. Investors should closely monitor upcoming earnings reports, changes in analyst estimates, and broader industry trends to gauge future performance.
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