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Walgreens Boots Alliance (WBA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Walgreens Boots Alliance (WBA) closed at $52.76, marking a +0.96% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.85%. At the same time, the Dow added 0.77%, and the tech-heavy Nasdaq gained 1.08%.

Coming into today, shares of the largest U.S. drugstore chain had lost 3.4% in the past month. In that same time, the Retail-Wholesale sector lost 4.04%, while the S&P 500 lost 2.06%.

Wall Street will be looking for positivity from WBA as it approaches its next earnings report date. In that report, analysts expect WBA to post earnings of $1.43 per share. This would mark a year-over-year decline of 6.54%. Meanwhile, our latest consensus estimate is calling for revenue of $34.54 billion, up 0.61% from the prior-year quarter.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. WBA is currently a Zacks Rank #4 (Sell).

Digging into valuation, WBA currently has a Forward P/E ratio of 8.72. For comparison, its industry has an average Forward P/E of 8.72, which means WBA is trading at a no noticeable deviation to the group.

Meanwhile, WBA's PEG ratio is currently 1.06. 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 was holding an average PEG ratio of 1.05 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 248, which puts it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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