Blue-chip Walgreens Boots’ Q1 Earnings to Show Flat Growth

Blue-chip pharmaceutical name Walgreens Boots Alliance is expected to report its fiscal first-quarter earnings of $1.22 per share, which is unchanged from the same period a year ago.

The Deerfield, Illinois-based retail pharmacy provider’s revenue is predicted to slump more than 9% to around $32.9 billion. The company has been able to beat earnings per share (EPS) estimates most of the time in the last two years. According to ZACKS Research, for the full-year earnings to be $4.91 per share and revenue of $131.5 billion.

“Reasons To Buy: Various strategic partnerships entered into by Walgreens Boots is expected to benefit the company more over the long run. The company’s progress in cost-cutting initiatives further boost our confidence in the stock,” noted analysts at ZACKS Research.

“Reasons To Sell: Persistent reimbursement pressure and competitive market offer tough challenges for Walgreens Boots. Also, the fluctuating weak U.S. macroeconomic environment still prevailing might hamper the company’s margin.”

Walgreens Boots Alliance stock closed 0.50% higher at $50.73 on Monday. It soared over 27% so far this year.

Analyst Comments

“Walgreens Boots Alliance operates a top 2 retail pharmacy chain in the US as well as Boots Pharmacy in Europe. The new Health Segment, guided to contribute as much as 60% to LT EPS growth in FY25 and beyond, carries significant investment requirements and integration risk. Management’s inexperience in healthcare could cause growing pains,” noted Ricky Goldwasser, Equity Analyst at Morgan Stanley.

“Risk of core operations slipping as focus increasingly shifts to healthcare.”

Walgreens Boots Alliance Stock Price Forecast

Seven analysts who offered stock ratings for Walgreens Boots Alliance in the last three months forecast the average price in 12 months of $54.86 with a high forecast of $70.00 and a low forecast of $49.00.

The average price target represents an 8.14% change from the last price of $50.73. Of those seven analysts, one rated “Buy”, five rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $49 with a high of $69 under a bull scenario and $33 under the worst-case scenario. The firm gave an “Underweight” rating on the retail pharmacy provider’s stock.

Several other analysts have also updated their stock outlook. Baird raised the target price to $70 from $68. Cowen and company lifted the price objective to $55 from $53. Jefferies cut the price target to $49 from $53. Credit Suisse upped the target price to $52 from $48.

Technical analysis also suggests it is good to hold for now as a 100-200-day MACD Oscillator signals a mild selling opportunity.

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