WBA - 3 Reasons Walgreens Can See Upside (Rating Upgrade)

2024-04-10 15:07:24 ET

Summary

• Since I last wrote about Walgreens in January, it's down by 21%. This was expected even then, prompting a Sell rating.
• There are signs of improvement now, though. Its non-GAAP EPS grew in Q2 FY24 and if it weren't for an impairment charge, it would have seen minor GAAP earnings too.
• The stock's forward P/E and dividend yield look good, though there are risks ahead in terms of the earnings outlook and an expected revenue slowdown.

Since I last wrote about the big pharmacy chain Walgreens Boots Alliance ( WBA ) in January, its price has fallen by a significant 21% and even more year-to-date [YTD]. The writing was on the wall even at the time, which led me to title the article “Walgreens: The Dividend Cut Is The Final Nail” and put a Sell rating on it....

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