Walgreens Boots Alliance (WBA) AI Stock Analysis

• Market Cap: $9.56B
• Dividend Yield: 9.04%
• Average Volume (3M): 23.01M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.39
• Revenue Growth: 5.62%
• EPS Growth: -1637.59%
• Country: US
• Employees: 193,000
• Sector: Healthcare
• Sector Strength: 79
• Industry: Medical - Pharmaceuticals
• EPS (TTM): -10.24
• Shares Outstanding: 864,735,200
• 10 Day Avg. Volume: 14,480,941
• 30 Day Avg. Volume: 23,013,223
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.06
• Price to Cash Flow (P/CF): -17.10
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.50
• Price Target Upside: 7.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

The overall stock score of 51 reflects Walgreens Boots Alliance's mixed performance. The company faces significant financial challenges, with declining profitability and high leverage. However, there are signs of optimism in technical analysis and a strong strategic focus on turnaround efforts. Valuation is weighted by high dividend yield but hindered by profitability issues. The earnings call showed promising sales growth and strategic focus, but also highlighted ongoing retail challenges.

Positive Factors

Acquisition financing

Sycamore has secured fully committed financing for the transaction.

Leadership confidence

WBA's chairman, Stefano Pessina, is voting in favor of the deal and will reinvest the cash consideration along with an additional cash investment into the acquiring company.

Negative Factors

Financial health concerns

There are concerns about WBA's lack of cash flow and upcoming debt challenges, which could complicate a potential deal.

Sector challenges

Sycamore Partners, which focuses on consumer and retail sectors, may face difficulties navigating the complexities of the healthcare sector.

Walgreens Boots Alliance Business Overview & Revenue Model

Company Description

Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and beauty retail company. It operates through two segments, the United States and International. The United States segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides central specialty pharmacy services and mail services. As of August 31, 2021, this segment operated 8,965 retail stores under the Walgreens and Duane Reade brands in the United States; and five specialty pharmacies. The International segment sells prescription drugs; and health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty retail stores and optical practices, as well as through boots.com and an integrated mobile application. It also engages in pharmaceutical wholesaling and distribution business in Germany. As of August 31, 2021, this segment operated 4,031 retail stores under the Boots, Benavides, and Ahumada in the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile; and 548 optical practices, including 160 on a franchise basis. Walgreens Boots Alliance, Inc. was founded in 1901 and is based in Deerfield, Illinois.

How the Company Makes Money

Walgreens Boots Alliance generates revenue through its retail and pharmacy operations across its key markets. The Retail Pharmacy USA segment contributes significantly to its earnings, primarily through the sale of prescription medications, over-the-counter drugs, and various health and wellness products. In the Retail Pharmacy International segment, revenue is driven by similar sales at Boots locations in markets like the UK and other European countries. Additionally, WBA benefits from its pharmaceutical wholesale division, which distributes healthcare products to numerous healthcare providers worldwide. Partnerships with healthcare providers and insurance companies also play a crucial role in their revenue model, enhancing their service offerings and market reach.

Walgreens Boots Alliance Financial Statement Overview

Summary

Walgreens Boots Alliance faces significant financial challenges across all verticals. The income statement shows declining profitability with persistent losses. The balance sheet reflects high leverage and low equity, raising concerns about financial stability. Cash flow issues further emphasize liquidity constraints. Improving profitability, reducing debt, and enhancing cash generation are critical for financial recovery.

Income Statement

Walgreens Boots Alliance has seen a decline in its financial performance, with negative EBIT and EBITDA margins of -9.49% and -8.07% respectively for TTM (Trailing-Twelve-Months). The company also reported a negative net profit margin of -5.87%, highlighting significant losses. Revenue growth is present but modest at 1.86%, indicating limited top-line expansion. Overall, the income statement reflects profitability challenges.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.75, indicating substantial leverage, which could pose financial risks. The return on equity is negative at -79.12%, reflecting the impact of net losses on shareholder returns. The equity ratio stands at 14.21%, suggesting a low proportion of equity in the asset base. The balance sheet indicates financial strain with high liabilities relative to equity.

Cash Flow

Cash flow metrics are concerning with no free cash flow reported for TTM, indicating a potential liquidity issue. The operating cash flow to net income ratio is negative, showing cash flow challenges amidst losses. Previous free cash flow growth was negative, highlighting the volatility in cash generation. Overall, the cash flow statement signals liquidity and cash management difficulties.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
150.41B	147.66B	139.08B	132.70B	132.51B	121.98B
	Gross Profit
26.53B	26.52B	27.07B	28.27B	28.07B	26.08B
	EBIT
-14.27B	-14.08B	-6.88B	1.39B	2.34B	982.00M
	EBITDA
-11.87B	-11.28B	3.48B	4.96B	5.96B	2.84B
	Net Income Common Stockholders
-8.83B	-8.64B	-3.08B	4.34B	2.54B	456.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.10B	3.11B	739.00M	2.47B	1.19B	516.00M
	Total Assets
26.33B	81.04B	96.63B	90.12B	81.28B	87.17B
	Total Debt
2.35B	32.85B	33.53B	35.48B	33.39B	40.14B
	Net Debt
-146.00M	31.53B	32.81B	34.12B	32.20B	39.62B
	Total Liabilities
11.39B	68.86B	68.14B	59.72B	57.46B	66.04B
	Stockholders Equity
14.95B	10.45B	20.02B	29.37B	23.82B	21.14B
Cash Flow		Free Cash Flow
0.00	-363.00M	141.00M	2.17B	4.18B	4.11B
	Operating Cash Flow
1.16B	1.02B	2.26B	3.90B	5.55B	5.48B
	Investing Cash Flow
1.72B	1.88B	-3.09B	-1.06B	4.07B	-1.30B
	Financing Cash Flow
-2.41B	-538.00M	-887.00M	-1.50B	-9.04B	-4.65B

Walgreens Boots Alliance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.68
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBA, the sentiment is Negative. The current price of 10.68 is below the 20-day moving average (MA) of 11.15, below the 50-day MA of 10.79, and above the 200-day MA of 10.12, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 53.86 is Neutral, neither overbought nor oversold. The STOCH value of 67.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WBA.

Walgreens Boots Alliance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	76 Outperform	$85.12B	18.47	6.07%	3.94%	4.02%	-43.51%
AMZN	73 Outperform	$1.89T	30.97	24.29%	―	10.99%	91.61%
WMT	73 Outperform	$699.55B	36.28	22.23%	0.98%	5.07%	25.86%
COST	71 Outperform	$429.08B	56.46	32.89%	0.48%	6.13%	12.14%
DG	65 Neutral	$20.77B	18.46	15.89%	2.50%	4.96%	-32.41%
WBA	51 Neutral	$9.56B	―	-60.05%	9.04%	5.62%	-1637.59%
Sector *	48 Neutral	$6.86B	1.11	-50.22%	2.47%	16.71%	1.53%

Walgreens Boots Alliance Corporate Events

Walgreens Boots Alliance Reports Q1 2025 Financial Results

Walgreens Boots Alliance announced its fiscal 2025 first quarter results, highlighting a 7.5% increase in sales to $39.5 billion, despite a decrease in adjusted earnings per share from $0.66 to $0.51. The company maintains its full-year adjusted EPS guidance, with challenges in U.S. retail sales and higher tax rates balanced by growth in U.S. Healthcare and international segments. The company is focused on strategic priorities, including stabilizing retail pharmacy and enhancing cost efficiencies, although it reported a net loss of $265 million due to increased operating costs and lower retail sales.