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

Zacks Equity Research

Walgreens Boots Alliance (WBA) closed at $42.97 in the latest trading session, marking a +1.92% move from the prior day. This change outpaced the S&P 500's 1.48% gain on the day. Meanwhile, the Dow gained 2.21%, and the Nasdaq, a tech-heavy index, added 0.77%.

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 $1.19 per share. This would mark a year-over-year decline of 19.05%. Meanwhile, our latest consensus estimate is calling for revenue of $34.23 billion, down 1.03% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.48 per share and revenue of $138.47 billion, which would represent changes of -8.51% and +1.17%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for WBA. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. The Zacks Consensus EPS estimate has moved 0.86% lower within the past month. WBA is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note WBA's current valuation metrics, including its Forward P/E ratio of 7.69. Its industry sports an average Forward P/E of 9.13, so we one might conclude that WBA is trading at a discount comparatively.

Meanwhile, WBA's PEG ratio is currently 1.96. 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. Retail - Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.71 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 156, putting it in the bottom 39% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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