Retail pharmacy chain Walgreens Boots Alliance (WBA) is scheduled to report its results for the fourth quarter of Fiscal 2024 before the market opens on Tuesday, October 15. Wall Street expects a steep decline in the company’s earnings due to challenging business conditions and higher costs. WBA shares have plunged nearly 65% so far in 2024 due to multiple headwinds.
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Analysts Expect WBA’s Q4 Earnings to Decline
For Q3 FY24, Walgreens missed Wall Street’s earnings expectations amid a tough backdrop for pharmacies, with inflation impacting U.S. consumers’ spending. Consequently, the company lowered its full-year outlook. On the positive side, WBA exceeded analysts’ revenue expectations, driven by the performance of its healthcare segment.
Analysts expect the company’s Q4 FY24 earnings to decline by more than 46% to $0.36, while revenue is estimated to grow modestly to $35.78 billion from $34.4 billion in the prior-year quarter.
Ahead of the results, TD Cowen analyst Charles Rhyee reiterated a Buy rating on the stock with a price target of $16. The analyst thinks that rather than the Q4 performance, the focus will be more on Fiscal 2025 EPS guidance and management’s commentary on the cash flow outlook. The analyst also awaits information on the company’s store closure and optimization plans, the timeline for the potential sale of VillageMD, and payor negotiations.
Like Rhyee, JPMorgan analyst Lisa Gill also expects investors to focus on FY25 expectations. Gill reaffirmed a Buy rating on the stock with a price target of $15. The analyst expects the company’s FY25 outlook to fall short of expectations. Gill thinks that investors need more clarity on the company’s priorities for VillageMD and Boots and other aspects like leverage to turn more constructive on WBA stock.
Options Traders Expect a Major Move
Using TipRanks’ Options tool, we can gauge options traders’ expectations for the stock in reaction to the earnings report. Based on a $6.50 strike price, with call options priced at $2.58 and put options at $0.04, the expected price movement based on the at-the-money straddle is 16.4%.
Is WBA a Good Stock to Buy?
Amid the ongoing challenges, Wall Street is sidelined on Walgreens Boots Alliance stock. The Hold consensus rating for the stock is based on two Buys, seven Holds, and three Sells. The average WBA stock price target of $13.67 implies 48.43% upside potential.
