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Walgreens Boots Alliance (WBA) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Walgreens Boots Alliance (WBA) closed at $39.07 in the latest trading session, marking a +1.43% move from the prior day. This change outpaced the S&P 500's 0.16% loss on the day. At the same time, the Dow lost 0.58%, and the tech-heavy Nasdaq gained 0.48%.

Prior to today's trading, shares of the largest U.S. drugstore chain had gained 7% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.35% and the S&P 500's gain of 5.06% in that time.

Wall Street will be looking for positivity from WBA as it approaches its next earnings report date. On that day, WBA is projected to report earnings of $1.03 per share, which would represent a year-over-year decline of 24.82%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.89 billion, up 1.59% from the year-ago period.

WBA's full-year Zacks Consensus Estimates are calling for earnings of $4.83 per share and revenue of $142.79 billion. These results would represent year-over-year changes of +1.9% and +2.33%, respectively.

Investors might also notice recent changes to analyst estimates for WBA. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% lower. WBA is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that WBA has a Forward P/E ratio of 7.97 right now. For comparison, its industry has an average Forward P/E of 9.22, which means WBA is trading at a discount to the group.

It is also worth noting that WBA currently has a PEG ratio of 1.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Pharmacies and Drug Stores industry currently had an average PEG ratio of 1.58 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 75, which puts it in the top 30% 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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