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Walgreens Tops Earnings Estimates, Misses on Revenue; Target Price $64 in Best Case

Vivek Kumar
·3 minuto per la lettura

Walgreens Boots Alliance, a global leader in retail and wholesale pharmacy, reported better-than-expected earnings in the fiscal second quarter and said it raised full-year 2021 outlook to mid-to-high single-digit growth in constant currency adjusted EPS, sending its shares up about 4% on Wednesday.

The Deerfield, Illinois-based retail pharmacy provider said adjusted earnings came in at $1.40 per share, beating analysts’ estimates of $1.12 per share. Although the company’s revenue rose 4.8% to $32.8 billion, it missed Wall Street’s consensus expectations of $33.8 billion.

The largest U.S. drugstore chain forecasts rests on administering 26-34 million doses in 2021 and includes benefits from the new vaccination rates, Reuters reported.

“We’re more constructive, given strong F2Q21 results, despite worse than expected COVID-19 impact, raised FY21 guide and a more favorable overall strategic outlook. More specifically, we like the acceleration in digitization, investment in automation, strong growth in online sales and new CEO’s previous success in digital transformation,” said Charles Rhyee, equity analyst at Cowen and Company.

Walgreens Boots Alliance shares, which slumped more than 32% in 2020, surged about 38% so far this year.

Walgreens Boots Alliance Stock Price Forecast

Thirteen analysts who offered stock ratings for Walgreens Boots Alliance in the last three months forecast the average price in 12 months of $50.09 with a high forecast of $64.00 and a low forecast of $40.00.

The average price target represents a -8.76% decrease from the last price of $54.90. Of those 13 analysts, two rated “Buy”, ten rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $52 with a high of $62 under a bull scenario and $35 under the worst-case scenario. The firm gave an “Equal-weight” rating on the retail pharmacy provider’s stock.

Several other analysts have also updated their stock outlook. Truist Securities raised the target price to $58 from $50. RBC lifted the stock price forecast to $52 from $44. Credit Suisse upped the target price to $50 from $46. CFRA increased the target price to $55.

Analyst Comments

“Roz Brewer’s debut cc provided early insights on the path forward, & guidance leaves room for near-term upside from broader adoption of higher COVID-19 reimbursement,” noted Ricky Goldwasser, equity analyst at Morgan Stanley.

Walgreens Boots Alliance operates a top 2 retail pharmacy chain in the US as well as Boots Pharmacy and Alliance drug distribution in Europe. With COVID disruption likely to weigh on results for the first part of FY21, at the least, along with ongoing structural reimbursement pressure, EBIT and EPS growth will likely be constrained for the foreseeable future. Walgreens has the balance sheet to deploy capital into M&A, as well as the strategic optionality to potentially reposition its portfolio of assets in a changing healthcare marketplace. Unveiling a new strategy under a new CEO that provides a roadmap to future growth is a potential catalyst for shares.”

Check out FX Empire’s earnings calendar

This article was originally posted on FX Empire