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Walgreens Boots Alliance (WBA) Gains But Lags Market: What You Should Know

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  • WBA
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Walgreens Boots Alliance (WBA) closed the most recent trading day at $46.08, moving +0.39% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.32%. At the same time, the Dow added 0.68%, and the tech-heavy Nasdaq lost 0.15%.

Coming into today, shares of the largest U.S. drugstore chain had lost 2.38% in the past month. In that same time, the Retail-Wholesale sector lost 0.46%, while the S&P 500 gained 3.61%.

Walgreens Boots Alliance will be looking to display strength as it nears its next earnings release. In that report, analysts expect Walgreens Boots Alliance to post earnings of $1.22 per share. This would mark no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.93 billion, down 9.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.92 per share and revenue of $131.38 billion, which would represent changes of -7.34% and -4.37%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Walgreens Boots Alliance. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 0.72% lower within the past month. Walgreens Boots Alliance is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, Walgreens Boots Alliance is currently trading at a Forward P/E ratio of 9.34. For comparison, its industry has an average Forward P/E of 9.48, which means Walgreens Boots Alliance is trading at a discount to the group.

Investors should also note that WBA has a PEG ratio of 2.11 right now. 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 1.94 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 195, which puts it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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