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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 $51.16, marking a +1.35% move from the previous day. This change outpaced the S&P 500's 1.21% gain on the day. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, added 1.35%.

Coming into today, shares of the largest U.S. drugstore chain had lost 7.92% in the past month. In that same time, the Retail-Wholesale sector lost 4.85%, while the S&P 500 lost 3.6%.

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 $1.42 per share, which would represent a year-over-year decline of 4.05%. Our most recent consensus estimate is calling for quarterly revenue of $33.88 billion, up 1.3% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.99 per share and revenue of $136.94 billion, which would represent changes of -0.5% and +4.11%, respectively, from the prior year.

Any recent changes to analyst estimates for WBA should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. WBA is currently a Zacks Rank #3 (Hold).

Investors should also note WBA's current valuation metrics, including its Forward P/E ratio of 8.43. For comparison, its industry has an average Forward P/E of 8.74, which means WBA is trading at a discount to the group.

It is also worth noting that WBA currently has a PEG ratio of 1.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Pharmacies and Drug Stores was holding an average PEG ratio of 1.26 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 205, which puts it in the bottom 20% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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