With earnings of $1.66 a share last August in the middle of September when Wag was $51.60 the p.e. of the stock was over 31 and beginning today the p.e. was under 22. That is a big percentage as far as the drop in p.e. . Today Wag finally broke into the $44 range. One could say it was overdue.
Technical Analysis: I�m curious to see what will happen over the next 4-6 weeks. We have a very easy to view descending Triangle down over beginning April to current at the low to $43.31 - $43.42 range. Today the $44.50 is going to be our main resistance. If the descending triangle theory hold true, I hate to say it we should have a sell of magnitude. I hope it breaks far above $44.50 to offset the pattern, but we will see.
I too have been observing the descending triangle and also believe it could portend lower prices if we don't pull out of it. I'm holding because I simply can't see the fundamentals allowing the price to fall more than two or three bucks.
This stock has been consolidating and adjusting since 2001 in an effort to decouple from those heady 50 PE days. People love to lament this, but anyone that bought a 50 PE stock should have had some definite exit strategy in place. Nothing wrong with buying a 50 PE stock, IMO, but appreciate the extra risk. Other stocks sharing a 50 PE with Walgreen were Kohls and Home Depot. And I posit that these companies were probably deserving of the multiple because they had almost 10 yr runs of 20% growth.