Walgreens Boots Alliance Q3 Results Beat Expectations; Shares Fall 7% as Company Expects to Administer Fewer Vaccines in Q4

Walgreens Boots Alliance Inc. (WBA) has delivered exceptional Q3 results, with both earnings and revenue beating expectations. However, shares of the pharmacy-chain operator fell 7.4% as the company stated that it expected to administer fewer vaccines in Q4 compared to Q3. Shares closed at $48.71 on Thursday.

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Adjusted earnings grew 83.4% to $1.51 per share and beat the consensus estimate of $1.14 per share.

Sales for the quarter came in at $34 billion, up 12.1% year-over-year, and surpassed the Streets’ estimate of $33.69 billion.

The company raised its fiscal 2021 guidance and now expects constant currency adjusted earnings per share to grow at 10%. (See Walgreens Boots Alliance stock chart on TipRanks)

The company is also on track to generate more than $2 billion in annual cost savings by fiscal 2022.

CEO of WBA Rosalind Brewer said, “We are accelerating our investments to advance our operational excellence, including technology innovations that support mass personalization, pharmacy of the future, and the next phase of growth in tech-enabled healthcare.”

Meanwhile, the company has also completed the sale of the Alliance Healthcare businesses to AmerisourceBergen (ABC) for $6.5 billion, made up of $6.275 billion in cash and 2 million shares of ABC common stock.

Part of the proceeds will be utilized to repay $3.3 billion of the company’s debt, and the rest will be used to boost the growth of its core retail pharmacy and healthcare businesses.

Both WBA’s pharmacy stores, Walgreens and Boots, are actively involved in administering COVID-19 vaccinations to control the pandemic.

Walgreens completed 17 million vaccinations in the third quarter and has administered more than 25 million COVID-19 vaccinations to date at over 4,000 locations as part of the Biden Administration’s National Month of Action in June.

In the fourth quarter, the company expects to administer around 7 million vaccinations.

Following the results, Raymond James analyst John Ransom reiterated a Hold rating on the stock.

Ransom stated that he was impressed by the company’s quarterly performance, however, he sees the company’s implied Q4 guidance as falling short of expectations.

The stock has an overall Hold consensus rating based on 1 Buy and 8 Holds. The average Walgreens Boots Alliance price target of $58.67 implies 20.45% upside potential from current levels.