Following a $10 billion acquisition by Sycamore Partners, Walgreens Boots Alliance (WBA) was removed from the S&P 500 (SPX) and replaced by Interactive Brokers Group (IBKR). The news means WBA stock will cease trading on the NASDAQ as of this week. Some expected the delisting to trigger passive outflows—forced, price-insensitive selling that might create an arbitrage opportunity. But the anticipated pressure never materialized.
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As Walgreens disappears from public markets, it leaves investors with a cautionary tale: a decade-long unraveling driven by flawed strategy, fierce competition, and crushing debt. Its downfall is a case study in how even an American icon can lose its edge—and a reminder that recognizing the warning signs early is key to spotting the next giant at risk. As a result, I’m turning Bearish on WBA, as well as its nearest rival, CVS Health (CVS).
A Collapse Ten Years in the Making
Walgreens’ decline was spurred by slow erosion resulting from internal missteps. The failed VillageMD integration is just one example. Direct rival CVS Health (CVS) executed a bold vertical integration with its Aetna acquisition, creating a closed-loop healthcare ecosystem Walgreens couldn’t replicate. At the same time, Walmart (WMT) and Amazon (AMZN) leveraged their scale and logistics dominance to erode Walgreens’ pharmacy and retail businesses, siphoning off foot traffic and market share.
Walgreens’ stock decline has been remarkable. Walgreens’ peak market capitalization exceeded $100 billion in 2015, only to fall under $10 billion a decade later. Recently, the company began issuing downward revisions to its earnings per share, or EPS, guidance. Then it had to resort to closing hundreds of underperforming stores to conserve cash. In fiscal year 2024, everything culminated in a dizzying net loss of $8.6 billion.
WBA’s Three Fatal Flaws
Walgreens’ downfall was signaled well before its exit from public markets. By 2023, cracks were already visible. Once proud of its “Dividend Aristocrat” status, the company slashed its payout by nearly 50% in January 2024, a move that laid bare its weakening financial foundation.
Margins told the next part of the story: adjusted operating margins eroded quarter after quarter, a clear sign of lost pricing power and fading competitive advantage. Then came the most damning signal— a $5.4 billion goodwill impairment tied to VillageMD, effectively admitting that the debt-fueled push into healthcare was a failed strategy. The very plan meant to rescue Walgreens instead hastened its decline.
Sycamore Partners—well known for acquiring troubled icons like Staples—has stepped in, buying Walgreens’ time to restructure. But the lessons from its collapse remain critical. Walgreens’ missteps now serve as a framework for spotting the next corporate giant at risk. And, ironically, the company that most echoes its mistakes today is none other than its fiercest rival, CVS Health (CVS).
In fact, as I explore below, applying the WBA lens to CVS reveals worrying parallels.
Walgreens’ Troubles Serve as a Warning for CVS Health
Like Walgreens, CVS’s core retail pharmacy business faces mounting pressure from shrinking margins, intensifying competition, and declining front-of-store sales. But CVS’s strategic bets have been even larger—and riskier. The company spent $69 billion on Aetna (announced in November 2018), followed by another $19 billion on Signify Health (in-home care) and Oak Street Health (primary care clinics). The result: a balance sheet now heavily burdened with debt.
The company’s dividend growth has also been strained since 2017, having only increased slightly from $0.50 per share in 2017.
CVS’s integration of its diverse healthcare acquisitions has proven both costly and complex, with early red flags such as Aetna’s rising medical loss ratio.
In Q2 2025, revenue climbed 8.4% YoY to $98.9 billion, but diluted EPS plunged from $0.61 to $0.80, as margin pressures weighed heavily on its Health Services segment. As shown below, CVS’s profit margins have been in a steady, gradual decline since 2019—a troubling long-term trend.
That said, CVS remains in a stronger position than Walgreens—for now. However, if margins continue to erode or a dividend cut becomes a possibility, investors may find a cautionary preview of the future right at the corner of healthy and happy.
Is CVS a Buy, Sell, or Hold?
CVS sports a consensus Strong Buy rating on Wall Street based on 14 Buy, one Hold, and zero Sell ratings in the past three months. CVS’s average stock price target of $83.60 implies an upside potential of ~16% over the next 12 months.
How Walgreens Lost Its Edge—and What It Means for CVS
The Walgreens saga is a cautionary tale of corporate struggle, market shifts, and failed reinvention. Its downfall wasn’t the result of a single misstep but a prolonged inability to adapt to changing retail and healthcare dynamics.
The company’s fall from blue-chip icon to private equity turnaround project underscores the forces of creative destruction at the heart of capitalism—and offers investors a framework for spotting similar risks at peers like CVS Health.