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

Zacks Equity Research

Walgreens Boots Alliance (WBA) closed at $42.02 in the latest trading session, marking a -1.01% move from the prior day. This move lagged the S&P 500's daily gain of 0.9%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 1.13%.

Coming into today, shares of the largest U.S. drugstore chain had lost 0.42% in the past month. In that same time, the Retail-Wholesale sector gained 16.32%, while the S&P 500 gained 14.3%.

WBA will be looking to display strength as it nears its next earnings release. On that day, WBA is projected to report earnings of $1.18 per share, which would represent a year-over-year decline of 19.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.23 billion, down 1.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.53 per share and revenue of $138.47 billion, which would represent changes of -7.68% and +1.17%, respectively, from the prior year.

Investors might also notice 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.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. WBA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, WBA is holding a Forward P/E ratio of 7.67. This valuation marks a discount compared to its industry's average Forward P/E of 8.47.

Investors should also note that WBA has a PEG ratio of 1.96 right now. 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 1.65 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 23% 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.

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


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