Walgreens Shares Rise on Q1 Earnings Beat, Outlook Revised

Walgreens shares jump nearly 3% in pre-market trading on Thursday after the global leader in retail and wholesale pharmacy reported better-than-expected earnings in the fiscal first quarter and lifted its full-year 2021 guidance.

The Deerfield, Illinois-based retail pharmacy provider said it earned $1.68 per share in the quarter ended Nov. 30, beating the market expectations of $1.22. The company’s revenue surged nearly 8% to $33.9 billion, that too above the analysts’ estimate of $32.74 billion.

The largest U.S. drugstore chain raised fiscal 2021 outlook to low-single-digit growth from flat previously.

Following this, Walgreens Boots Alliance shares rose nearly 3% to $55.41 in pre-market trading on Thursday. The stock surged over 30% in 2021.

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 Stock Price Forecast

Seven analysts who offered stock ratings for Walgreens 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 a 1.59% change from the last price of $54.00. 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. Credit Suisse upped the target price to $52 from $48.

Technical analysis also suggests it is good to buy as 100-Day Moving Average and 20-200-day MACD Oscillator signals a buying opportunity.

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