CVS - Walgreens Boots Alliance: Maybe I Was Wrong
2024-06-28 12:57:07 ET
Summary
- Walgreens Boots Alliance stock has declined over 83% from its all-time high, underperforming the S&P 500 and competitor CVS Health.
- The company reported mediocre third quarter results, but lowered full-year guidance once again.
- Although the stock seems extremely cheap, I would pass on an investment at this point.
In the last few years, I published several articles on Walgreens Boots Alliance, Inc. ( WBA ) and similar to its competitor CVS Health I was always bullish in these articles. My last article about Walgreens Boots Alliance was published in January 2024, and I was bullish once again. And although I was not blind to the risks and mediocre performance in the recent past (especially the stock price performance was difficult to ignore), I still remained optimistic. In my last article, I wrote:
Walgreens Boots Alliance: Maybe I Was WrongI would still argue that Walgreens Boots Alliance is too cheap to ignore. Walgreens Boots Alliance most likely does not have a wide economic moat around its business. It certainly has some competitive advantages – its huge size for example – making it not the easiest target for competition. But at this point, Walgreens Boots Alliance is much more vulnerable than its competitor CVS Health. And in the last few years we also see declining margins and low return on invested capital – underlining that WBA is rather in trouble.