A new report from The Wall Street Journal claims Walgreens Boots Alliance (WBA) is in talks to sell itself to private equity firm Sycamore Partners. Insiders claim that the private equity firm plans to trim the fat from Walgreens, including selling some of its business units. That might be the best outcome, considering the pharmacy operator’s market capitalization has fallen from over $100 billion in 2015 to $9.14 billion.
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The latest reports suggest that this deal could take place early next year. This would mark a return to major deals for Sycamore Partners, which has focused on smaller acquisitions lately. Its last big purchase saw it pay roughly $7 billion for office supply retailer Staples in 2017.
What This Means for WBA Stock
A deal between Walgreens Boots Alliance and Sycamore Partners would take the company private. That would result in its shares no longer trading on a public exchange. This could grant WBA shareholders a pretty payout as Sycamore Partners will likely offer a premium for the shares.
Investors are betting on just that today, with many flocking to Walgreens shares. This has over 42.23 million units changing hands as of this writing. For the record, the stock’s daily average trading volume over the last three months is a fraction of that at 15.78 million shares.
With this heavy trading comes a 21.47% increase for WBA shares today. That’s a welcome change from its year-to-date drop of 58.46% and 12-month decrease of 52.85%.
Is WBA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Walgreens Boots Alliance is Hold based on two Buy, seven Hold, and three Sell ratings over the last three months. With that comes an average price target of $13.67, a high of $22, and a low of $9. This represents a potential 26.81% upside for WBA shares.
