Walgreens Boots Alliance Tops Earnings and Revenue Estimates, Lifts 2021 Guidance

Walgreens Boots Alliance, a global leader in retail and wholesale pharmacy, reported better-than-expected earnings in the fiscal third quarter and lifted its full-year 2021 guidance.

The Deerfield, Illinois-based retail pharmacy provider said adjusted earnings came in at $1.51 per share, beating analysts’ estimates of $1.17 per share. The company’s revenue rose over 12% to $34.03 billion, higher than Wall Street’s consensus expectations of $33.76 billion.

The largest U.S. drugstore chain raised fiscal 2021 guidance from mid-to-high single-digit growth to around 10% growth in constant currency-adjusted EPS from continuing operations. The revised guidance reflects strong results in the third quarter and greater clarity on the impact of COVID-19 vaccinations.

Despite that Walgreens Boots Alliance shares slumped about 9% to $48.03 on Thursday. The stock surged more than 20% so far this year.

Walgreens Boots Alliance Stock Price Forecast

Nine analysts who offered stock ratings for Walgreens Boots Alliance in the last three months forecast the average price in 12 months of $58.67 with a high forecast of $72.00 and a low forecast of $50.00.

The average price target represents 19.52% from the last price of $49.09. Of those nine analysts, one rated “Buy”, eight rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $60 with a high of $75 under a bull scenario and $36 under the worst-case scenario. The firm gave an “Equal-weight” rating on the retail pharmacy provider’s stock.

Several other analysts have also updated their stock outlook. Jefferies lowered the target price to $59 from $62. Mizuho raised the target price to $55 from $47. Guggenheim lifted the price target to $62 from $58. Citigroup increased the price target to $60 from $50.

Analyst Comments

“Walgreens Boots Alliance operates a top 2 retail pharmacy chain in the US as well as Boots Pharmacy and Alliance drug distribution in Europe. With COVID-19 disruption likely to weigh on results for the first part of FY21, at the least, along with ongoing structural reimbursement pressure, EBIT and EPS growth will likely be constrained for the foreseeable future,” noted Ricky Goldwasser, equity analyst at Morgan Stanley.

“Walgreens has the balance sheet to deploy capital into M&A, as well as the strategic optionality to potentially reposition its portfolio of assets in a changing healthcare marketplace. Unveiling a new strategy under a new CEO that provides a roadmap to future growth is a potential catalyst for shares.”

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