/Walgreens%20Boots%20Alliance%20Inc%20store-%20by%20Sundry%20Photography%20via%20Shutterstock.jpg)
Walgreens Boots Alliance, Inc. (WBA) is a healthcare and retail company with a market cap of $7.5 billion. The Deerfield, Illinois-based company provides prescription and non-prescription medications, health and wellness services, and general merchandise through its retail drugstores and online platforms across multiple countries.
Companies valued at less than $10 billion or more are generally considered “mid-cap” stocks and Walgreens Boots Alliance fits this criterion perfectly. WBA is unique in the market for its extensive portfolio, which includes leading retail pharmacy chains like Walgreens and Boots, a robust presence in pharmaceutical manufacturing and distribution, and its focus on integrated healthcare services across nine countries.
However, the beleaguered drug store and pharmacy chain has fallen 68% from its 52-week high of $27.05, recorded in January. Shares of WBA have dipped 45.9% over the past three months, underperforming the Health Care Select Sector SPDR Fund’s (XLV) 5.2% gains over the same time frame.
Longer term, WBA is down 66.9% on a YTD basis, lagging behind XLV’s 13.3% gains. Moreover, shares of Walgreens Boots Alliance have declined 59.1% over the past 52 weeks, compared to XLV’s 18.7% gains over the same time frame.
To confirm the bearish price trend, WBA has been trading below its 50-day and 200-day moving averages despite some fluctuations since last year.
Despite beating revenue estimates, Walgreens Boots Alliance shares plunged 22.2% on Jun. 27 after reporting weaker-than-expected Q3 adjusted EPS of $0.63 and cutting full-year earnings guidance for the second time, lowering it to a range of $2.80 to $2.95 per share. Additionally, management cited weak consumer demand, increased theft, and plans to close unprofitable stores, further worrying investors about the company's outlook. Moreover, the stock fell nearly 9% on Aug. 27 after Pfizer launched its direct-to-consumer telehealth platform, which may reduce pharmacy traffic. Plus, Eli Lilly's announcement of a 50% price cut for its GLP-1 drug Zepbound through its e-commerce platform poses a further threat to Walgreens' sales.
WBA has underperformed compared to its top rival, CVS Health Corporation (CVS), which has declined 19.2% over the past 52 weeks and 27.2% YTD.
Due to WBA’s weak price action, analysts are cautious about its prospects. The stock has a consensus rating of “Hold” from the 15 analysts covering the stock, and the mean price target of $11.73 represents a premium of 34.7% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
