Walgreens Preps for Q1 Earnings Release Amid Stock Challenges
Walgreens Boots Alliance, Inc. (WBA), located in Deerfield, Illinois, is a key player in the integrated healthcare and retail pharmacy market. With a market capitalization of $8.3 billion, Walgreens is structured into three segments: U.S. Retail Pharmacy, International, and U.S. Healthcare. The company is set to announce its Q1 earnings before the market opens on Thursday, Jan. 9.
Analysts forecast that Walgreens will report a profit of $0.37 per share. This figure represents a substantial drop of 43.9% compared to $0.66 per share in the same quarter last year. Over the last four quarters, Walgreens has met or exceeded Wall Street’s EPS estimates in three instances, falling short only once. However, its adjusted EPS for the previous quarter did beat consensus estimates by 8.3%, providing a glimmer of hope.
Fiscal 2025 Projections Show Significant Cut
Looking forward to fiscal 2025, analysts anticipate a further decrease in adjusted EPS, predicting it will fall to $1.52, down 47.2% from $2.88 in fiscal 2023.
Walgreens Lags Behind Market Performance
Over the past year, Walgreens shares have dropped 64.5%, significantly underperforming compared to the S&P 500 Index’s ($SPX) gains of 23.8%. Even the Health Care Select Sector SPDR Fund’s (XLV) modest returns have outpaced Walgreens on a year-to-date basis.
Investors React Positively to Q4 Performance
On October 15, WBA shares surged 15.8% following the release of its Q4 earnings report. The company generated $37.5 billion in sales, beating analysts’ expectations of $35.75 billion. Adjusted earnings per share reached $0.39, also above consensus. Investors have responded positively to the decision to close 1,200 stores over the next three years, including 500 in fiscal 2025, as this is expected to enhance adjusted earnings and free cash flow.
Analysts Maintain a Neutral Stance on WBA Stock
Currently, the overall sentiment regarding WBA stock is neutral, reflected by an overall “Hold” rating. Out of 15 analysts covering Walgreens, two recommend “Strong Buy,” ten suggest “Hold,” two advocate for “Moderate Sell,” and one calls for “Strong Sell.”
The average price target stands at $9.87, indicating a potential upside of 6.6% from the current stock price.
On the date of publication, Kritika Sarmah 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.
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