Walgreens Boots Alliance (WBA) Gains But Lags Market: What You Should Know

·3-min read

Walgreens Boots Alliance (WBA) closed at $54.71 in the latest trading session, marking a +1.05% move from the prior day. This change lagged the S&P 500's 1.49% gain on the day.

Prior to today's trading, shares of the largest U.S. drugstore chain had gained 0.78% over the past month. This has outpaced the Retail-Wholesale sector's loss of 5.6% and the S&P 500's loss of 0.62% in that time.

WBA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.15, up 38.55% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $33.65 billion, down 2.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.89 per share and revenue of $133.38 billion. These totals would mark changes of +3.16% and -4.41%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for WBA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.84% lower. WBA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, WBA is currently trading at a Forward P/E ratio of 11.08. Its industry sports an average Forward P/E of 11.06, so we one might conclude that WBA is trading at a premium comparatively.

Investors should also note that WBA has a PEG ratio of 1.62 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.64 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 128, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WBA in the coming trading sessions, be sure to utilize Zacks.com.


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