Morningstar Rating
Stock XNAS Rating as of
$12.10 −0.10(0.78%)
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Company Report
Company Report
Walgreens Earnings: Disappointing Results on Tough Retail Environment Muddying Near-Term Recovery
Keonhee Kim
No-moat Walgreens reported disappointing third-quarter earnings. After fully digesting those results, we are raising Walgreens' uncertainty to Very High from High, lowering our capital allocation to Poor from Standard, and lowering our fair value estimate to $23 per share from $33. Our new assessment of the firm models in continued challenges in the overall landscape, a more severe margin headwind in the US Retail Pharmacy segment, and slower growth in US Healthcare business. Reimbursem*nt pressures from pharmacy benefit managers continue to compress profitability for the back end of the pharmacy business, and we think the retail business, which we originally thought should counteract headwinds and lift margins, will continue to struggle in the near and medium term, with the likelihood of full recovery uncertain.
Price vs Fair Value
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Price vs Fair Value
WBA is trading at a 660% premium.
Price
$12.18
Fair Value
$69.00
Uncertainty
Very High
- 1-Star Price
- $39.36
- 5-Star Price
- $64.80
- Economic Moat
- Pgv
- Capital Allocation
- Sbkgl
Bulls Say, Bears Say
Bulls Say, Bears Say
Bulls
Walgreens is one of the largest domestic retail pharmacy chains, with around 8,800 US locations. Over three fourths of Americans live within five miles of a Walgreens location.
Bears
The confluence of reimbursem*nt pricing pressure in the retail pharmacy and tough general retail store conditions has diminished profitability and ROICs.
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News
News
- Can McDonald's make money on $5 meals when inflation is so high?
- WBA Investors Have the Opportunity to Join Walgreens Boots Alliance, Inc. Securities Fraud Investigation with the Schall Law Firm
- Walgreens Boots Alliance's stock headed for 27-year low after profit miss and lowered guidance
- Walgreens' junk bonds among biggest decliners in high-yield market after earnings disappoint
- Walgreens Boots Alliance Reports Fiscal 2024 Third Quarter Results
- Wall Street sees corporate profit margins creeping toward 2021 levels, as three household names prep earnings
- Biden White House applauds Walmart, Amazon for grocery discounts amid inflation fight
Trading Information
Trading Information
- Previous Close Price
- $12.19
- Day Range
$11.96–12.69
- 52-Week Range
$11.68–31.32
- Bid/Ask
- $12.05/$12.07
- Market Cap
- $10.43 Bil
- Volume/Avg
- 54.3 Mil/15.1 Mil
Key Statistics
Key Statistics
- Price/Earnings (Normalized)
- 3.84
- Price/Sales
- 0.07
- Dividend Yield (Trailing)
- 12.07%
- Dividend Yield (Forward)
- 8.27%
- Total Yield
- 12.73%
Company Profile
Company Profile
Walgreens Boots Alliance is one of the largest retail pharmacy chains in the U.S., with over 8,500 locations. Nearly three quarters of Americans live within five miles of a Walgreens location. Roughly two thirds of revenue is generated from prescription drug sales; Walgreens makes up 20% of total prescription revenue in the U.S. Walgreens also generates sales from retail products (general wellness consumables and its own branded merchandise), European drug wholesale, and healthcare. With more locations incorporating additional services like Health Corner and Village Medical, Walgreens creates an omnichannel experience for patients and positions itself as a one-stop healthcare provider.
- Sector
- Healthcare
- Industry
- Pharmaceutical Retailers
- Stock Style Box
- Mid Value
- Total Number of Employees
- 331,000
Competitors
Competitors
- Dollar General Corp DG
- Walmart Inc WMT
- CVS Health Corp CVS
Valuation
Valuation
| Metric | WBA | DG | WMT |
|---|---|---|---|
Price/Earnings (Normalized) | 3.84 | 19.25 | 29.17 |
Price/Book Value | 0.77 | 4.15 | 6.70 |
Price/Sales | 0.07 | 0.74 | 0.83 |
Price/Cash Flow | 6.91 | 11.36 | 15.73 |
Price/Earnings
WBA
DG
WMT
Financial Strength
Financial Strength
| Metric | WBA | DG | WMT |
|---|---|---|---|
Quick Ratio | 0.27 | 0.11 | 0.19 |
Current Ratio | 0.65 | 1.22 | 0.80 |
Interest Coverage | −25.87 | 7.12 | 10.38 |
Quick Ratio
WBA
DG
WMT
Profitability
Profitability
| Metric | WBA | DG | WMT |
|---|---|---|---|
Return on Assets (Normalized) | 2.96% | 5.07% | 7.77% |
Return on Equity (Normalized) | 15.55% | 23.87% | 24.81% |
Return on Invested Capital (Normalized) | 5.58% | 7.31% | 14.14% |
Return on Assets
WBA
DG
WMT
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Pharmaceutical Retailers Industry Comparables
Pharmaceutical Retailers Industry Comparables
| 1-Day Chart | Name | Price | Morningstar Rating for Stocks | Capital Allocation | Economic Moat | Market Cap |
|---|---|---|---|---|---|---|
| Raia Drogasil SA ADR RADLY | — | Cfnxyxd | $8.0 Bil | |||
| Alibaba Health Information Technology Ltd ADR ALBBY | — | Mwswlt | $6.4 Bil | |||
| Alibaba Health Information Technology Ltd ALBHF | — | Xlclk | $6.4 Bil | |||
| Clicks Group Ltd ADR CLCGY | — | Bymvqs | $4.4 Bil | |||
| Sundrug Co Ltd SDGCF | — | Cqblhz | $3.0 Bil | |||
| Tsuruha Holdings Inc TSUSF | — | Wtbvgjk | $2.8 Bil | |||
| Sugi Holdings Co Ltd SGIPF | — | Vpvk | $2.5 Bil | |||
| Redcare Pharmacy NV ADR SAEYY | — | Qkbgy | $2.2 Bil | |||
| Redcare Pharmacy NV SHPPF | — | Ctcmd | $2.2 Bil |
