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Walgreens Boots Alliance (WBA) Gains But Lags Market: What You Should Know

Zacks Equity Research
Realty Income Corp. (O) closed the most recent trading day at $68.74, moving -1.94% from the previous trading session.

In the latest trading session, Walgreens Boots Alliance (WBA) closed at $50.98, marking a +0.35% move from the previous day. This change lagged the S&P 500's 0.61% gain on the day. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.53%.

Coming into today, shares of the largest U.S. drugstore chain had lost 5.05% in the past month. In that same time, the Retail-Wholesale sector lost 8.25%, while the S&P 500 lost 3.77%.

WBA will be looking to display strength as it nears its next earnings release, which is expected to be June 27, 2019. The company is expected to report EPS of $1.43, down 6.54% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $34.54 billion, up 0.61% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.99 per share and revenue of $136.77 billion, which would represent changes of -0.5% and +3.98%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for WBA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% lower. WBA currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that WBA has a Forward P/E ratio of 8.48 right now. Its industry sports an average Forward P/E of 8.48, so we one might conclude that WBA is trading at a no noticeable deviation comparatively.

Investors should also note that WBA has a PEG ratio of 1.04 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Pharmacies and Drug Stores industry currently had an average PEG ratio of 1.04 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 247, putting it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WBA in the coming trading sessions, be sure to utilize Zacks.com.


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