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Walgreens Boots Alliance (WBA)
NASDAQ:WBA
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Walgreens Boots Alliance
(NASDAQ:WBA)
57Neutral
Positive Factors
Private Equity Takeover
A private equity takeover could provide WBA with additional flexibility to address operational challenges in the private market.
Profitability
US Healthcare's profitability improved significantly, driven by contributions from VillageMD and Shields.
Shareholder Support
WBA's chairman, Stefano Pessina, is voting in favor of the deal and will reinvest the cash consideration into the acquiring company.
Negative Factors
Competition
CVS has been gaining share vs. the market, including WBA, for a few years.
Debt Concerns
There are concerns about WBA's lack of cash flow and upcoming debt challenges, which could complicate a potential deal.
Guidance Withdrawal
Guidance was withdrawn due to the Sycamore deal and there will be no conference call to discuss results.
Walgreens Boots Alliance (WBA) vs. S&P 500 (SPY)
Market Cap
$9.76B
Dividend Yield8.86%
Average Volume (3M)11.77M
Price to Earnings (P/E)―
Beta (1Y)0.35
Revenue Growth5.08%
EPS Growth4.43%
CountryUS
Employees193,000
SectorHealthcare
Sector Strength41
IndustryMedical - Pharmaceuticals
Share Statistics
EPS (TTM)0.63
Shares Outstanding864,737,900
10 Day Avg. Volume9,790,553
30 Day Avg. Volume11,768,153
Financial Highlights & Ratios
PEG Ratio-0.05
Price to Book (P/B)1.36
Price to Sales (P/S)0.00
P/FCF Ratio16.99
Enterprise Value/Market Cap4.01
Enterprise Value/Revenue0.07
Enterprise Value/Gross Profit1.48
Enterprise Value/Ebitda-1.10
Forecast
1Y Price Target
$12.30Price Target Upside8.95% Upside
Rating ConsensusHold
Number of Analyst Covering8
Walgreens Boots Alliance Business Overview & Revenue Model
Company DescriptionWalgreens Boots Alliance, Inc. (WBA) is a global leader in retail pharmacy, health, and wellness. It operates through two primary divisions: Retail Pharmacy USA and Retail Pharmacy International. The company offers a wide range of pharmaceutical, health, and wellness products and services through its extensive network of retail drugstores, including Walgreens in the United States and Boots in the United Kingdom and other countries. WBA is committed to improving health outcomes through innovative pharmacy services and personalized care.
How the Company Makes MoneyWalgreens Boots Alliance generates revenue primarily through the sale of prescription medications, over-the-counter health products, and general merchandise. In the Retail Pharmacy USA segment, WBA makes money from dispensing prescription drugs, front-end sales of consumer goods, and health services, including vaccinations and health consultations. The Retail Pharmacy International segment contributes earnings through similar sales channels in international markets, particularly in Europe. Additionally, WBA benefits from strategic partnerships with healthcare providers and pharmacy benefit managers, which enhance its service offerings and expand its customer base. The company also explores opportunities in digital health and e-commerce to further drive revenue growth.
Walgreens Boots Alliance Key Performance Indicators (KPIs)
Any
Gross Margin by Segment
Shows the profitability of different business segments, highlighting which areas are most efficient and where there might be room for improvement in cost management.
Shows the profitability of different business segments, highlighting which areas are most efficient and where there might be room for improvement in cost management.
Data provided by:
Main Street Data
Main Street DataWalgreens Boots Alliance Financial Statement Overview
Summary
Walgreens Boots Alliance faces significant challenges with profitability and leverage. While revenue has grown, profit margins are negative, and the balance sheet shows high debt levels. Cash flow metrics provide some positive signs of recovery, particularly in free cash flow, but overall financial stability remains a concern.Income Statement
Walgreens Boots Alliance has faced recent financial challenges as reflected in its TTM (Trailing-Twelve-Months) results. The gross profit margin stands at 17.4%, but negative EBIT and net profit margins indicate profitability issues, with a net profit margin of -3.8%. Revenue growth over the last few years is present but fluctuating, indicating instability.55
Neutral
Balance Sheet
The company's balance sheet shows significant leverage with a debt-to-equity ratio of over 4.2, indicating high financial risk. The equity ratio is low at 10.1%, reflecting limited equity compared to assets. Negative return on equity further highlights profitability challenges.45
Neutral
Cash Flow
There is a moderate operating cash flow to net income ratio of -0.28, indicating cash flow constraints despite improving free cash flow. The free cash flow growth rate is positive, signaling some recovery in cash generation, though still not robust.60
Neutral
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 151.94B | 147.66B | 139.08B | 132.70B | 132.51B | 121.98B | Gross Profit |
| 26.43B | 26.52B | 27.07B | 28.27B | 28.07B | 26.08B | EBIT |
| -3.06B | -14.08B | -6.88B | 1.39B | 2.34B | 982.00M | EBITDA |
| -3.02B | -11.28B | 3.48B | 4.96B | 5.96B | 2.84B | Net Income Common Stockholders |
| -5.78B | -8.64B | -3.08B | 4.34B | 2.54B | 456.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.13B | 3.11B | 739.00M | 2.47B | 1.19B | 516.00M | Total Assets |
| 70.22B | 81.04B | 96.63B | 90.12B | 81.28B | 87.17B | Total Debt |
| 30.13B | 32.85B | 33.53B | 35.48B | 33.39B | 40.14B | Net Debt |
| 29.43B | 31.53B | 32.81B | 34.12B | 32.20B | 39.62B | Total Liabilities |
| 62.96B | 68.86B | 68.14B | 59.72B | 57.46B | 66.04B | Stockholders Equity |
| 7.11B | 10.45B | 20.02B | 29.37B | 23.82B | 21.14B |
| Cash Flow | Free Cash Flow | ||||
| 571.00M | -363.00M | 141.00M | 2.17B | 4.18B | 4.11B | Operating Cash Flow |
| 1.60B | 1.02B | 2.26B | 3.90B | 5.55B | 5.48B | Investing Cash Flow |
| 1.32B | 1.88B | -3.09B | -1.06B | 4.07B | -1.30B | Financing Cash Flow |
| -2.38B | -538.00M | -887.00M | -1.50B | -9.04B | -4.65B |
Walgreens Boots Alliance Technical Analysis
Positive
11.29
Price Trends
11.06
Positive
10.80
Positive
10.00
Positive
Market Momentum
0.09
Negative
59.66
Neutral
48.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBA, the sentiment is Positive. The current price of 11.29 is above the 20-day moving average (MA) of 11.07, above the 50-day MA of 11.06, and above the 200-day MA of 10.00, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 59.66 is Neutral, neither overbought nor oversold. The STOCH value of 48.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBA.
Walgreens Boots Alliance Risk Analysis
Walgreens Boots Alliance disclosed 46 risk factors in its most recent earnings report. Walgreens Boots Alliance reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Walgreens Boots Alliance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $16.58B | 40.10 | 5.25% | ― | 7.15% | 41.96% | |
73 Outperform | $12.75B | 11.12 | 18.35% | 0.40% | 9.73% | 51.87% | |
70 Outperform | $9.22B | 102.18 | 2.67% | ― | 3.31% | ― | |
57 Neutral | $9.76B | ― | -56.13% | 8.86% | 5.08% | 4.43% | |
52 Neutral | $5.15B | 3.02 | -44.64% | 2.83% | 16.44% | -0.47% | |
51 Neutral | $10.38B | ― | -21.25% | 5.43% | -6.88% | -6809.78% | |
51 Neutral | $7.70B | 1.93 | -7.10% | ― | -20.84% | -102.48% |
* Healthcare Sector Average
Performance Comparison
WBA
Walgreens Boots Alliance
11.29
-5.60
-33.16%
COO
Cooper Co
82.92
-14.29
-14.70%
VTRS
Viatris
8.84
-1.76
-16.60%
QGEN
Qiagen
42.65
-2.81
-6.18%
UHS
Universal Health
197.94
17.26
9.55%
ROIV
Roivant Sciences
10.79
-0.58
-5.10%
Walgreens Boots Alliance Earnings Call Summary
Earnings Call Date:Apr 08, 2025
(Q1-2025)
| % Change Since: 5.42%|
Next Earnings Date:Jun 26, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales growth across all segments, improved free cash flow, and positive performance in the pharmacy and healthcare segments. However, it also noted challenges with declining retail sales in the U.S. and a significant decline in adjusted EPS. Despite these challenges, the company remains focused on executing its turnaround strategy.Q1-2025 Updates
Positive Updates
Sales Growth Across All Segments
Sales increased 6.9% on a constant currency basis with growth across all segments.
Improved Free Cash Flow
Free cash flow improved due to decreased capital expenditures and higher adjusted operating income.
U.S. Pharmacy Services Performance
U.S. Pharmacy Services performed better than expectations with higher margin for COVID-19 vaccines.
International Business Growth
Total sales in the International segment grew 6.5% with Germany wholesale increasing 11.3% and Boots UK up 4.5%.
Healthcare Segment Growth
U.S. Healthcare sales of $2.2 billion increased 12%, with strong performance from VillageMD and Shields.
Negative Updates
Decline in U.S. Retail Sales
Comparable retail sales in the U.S. declined 4.6% in the quarter due to a softer cough, cold, and flu season and challenging consumer discretionary spending.
Adjusted EPS Decline
Adjusted EPS declined 23% year-over-year on a constant currency basis due to prior year sale-leaseback gains and lower Cencora equity income.
Ongoing Retail Challenges
Persistent deterioration in consumer discretionary spending and promotional environment continue to impact the retail business.
Company Guidance
During the Walgreens Boots Alliance earnings call for Q1 2025, the management provided detailed guidance on several key metrics. Sales increased by 6.9% on a constant currency basis, with growth across all segments. The adjusted earnings per share (EPS) was reported at $0.51, reflecting a 23% decline year-over-year, primarily due to prior year sale-leaseback gains and lower Cencora equity income. Despite these challenges, the U.S. Retail Pharmacy segment saw a notable comparable sales growth of 8.5%, driven by pharmacy performance, although retail sales declined. In the U.S. Healthcare segment, sales rose by 12%, with VillageMD and Shields showing strong performance. The company achieved significant progress in its Footprint Optimization Program, closing about 70 stores in the quarter and planning for nearly 450 more by the end of 2025. For the fiscal year, Walgreens Boots Alliance reaffirmed its adjusted EPS guidance of $1.40 to $1.80, while also expecting retail comp sales to decline approximately 4% to 5%. The company emphasized its focus on stabilizing and turning around its business by improving drug procurement, optimizing store operations, and advancing its pharmacy services, with a strong emphasis on cost management and cash flow improvement.Walgreens Boots Alliance Corporate Events
Private Placements and Financing
Walgreens Boots Alliance Initiates Securitization Facility
Neutral
Apr 25, 2025
On April 24, 2025, Walgreens Boots Alliance‘s subsidiary, Wilmot Retail, LLC, initiated an accounts receivable securitization facility with a borrowing capacity of up to $2.5 billion. This move was aimed at repaying outstanding amounts under two senior unsecured delayed draw term loan credit agreements, thereby terminating all commitments under these facilities.
Spark’s Take on WBA Stock
According to Spark, TipRanks’ AI Analyst, WBA is a Neutral.
Walgreens Boots Alliance shows moderate potential with strong sales growth and a focus on turnaround strategies. However, profitability issues, high leverage, and declining retail sales pose significant risks. The stock’s technical indicators are slightly positive, and the high dividend yield may appeal to investors despite the negative P/E ratio.
To see Spark’s full report on WBA stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.