Walgreens Boots Alliance Q1 Earnings Preview: WBA Up 10.4% Since Last Report

in INVESTING IDEAS by

Walgreens Boots Alliance, Inc. (NASDAQGS:WBA) is scheduled to report Q1 earnings results on January 8, 2020. Management plans host a one-hour conference call starting at 8:30 a.m. Eastern time.

The company is expected to report earnings of $1.41/share on revenue of $34.547 billion. The consensus earnings per share (EPS) of $1.41/share is based on a poll of 21 analysts and represents a decline of -3.4% over the same quarter last year when the company reported earnings of $1.46/share.

The revenue forecast of $34.547 billion based on a poll of 16 analysts implies a year-over-year (YoY) growth of 2.2%. Last year the company reported $33.793 billion in revenue for the quarter.

Expected to report EPS decline of -$0.05/share for Q1, 2019
Metric Expected Prior Year YoY Change
Revenue $34,546.50 $33,793.00 2.2%
EPS $1.41 $1.46 -3.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from Walgreens Boots Alliance for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2019 $1.41 $1.43 1.3% Beat
Q3, 2019 $1.43 $1.47 3.2% Beat
Q2, 2019 $1.71 $1.64 -4.1% Missed
Q1, 2019 $1.44 $1.46 1.4% Beat
Q4, 2018 $1.45 $1.48 2.1% Beat
Q3, 2018 $1.48 $1.53 3.4% Beat
Q2, 2018 $1.54 $1.73 12.0% Beat
Q1, 2018 $1.26 $1.28 1.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending August 31, 2019, the stock price jumped slightly by increasing by 1.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-28 $55.42 $56.27 1.5% Increase
2019-06-27 $52.38 $54.67 4.4% Increase
2019-04-02 $63.49 $54.84 -13.6% Decline
2018-12-19 $75.48 $69.61 -7.8% Decline

Fundamentals And Technical Analysis

Walgreens Boots Alliance is currently trading at $59.59/share, up 0.9% for the day. The company is trading at approximately 79.5% of its 52-week high of $74.94/share. The company’s stock price is up 5.9% since the last earnings report and up 1.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.68 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 13.2x and a forward P/E multiple of 10.0x.

Walgreens Boots Alliance’s current share price also implies a price-to-book (P/B) multiple of 2.2x. The following table summarizes some other key fundamental ratios:

Data as of January 6, 2020
Metric Value
Last Fiscal Period FY2019.Q4
Period End Date August 31, 2019
Stock Price (Current) $59.59
P/E Ratio 13.2x
P/E Ratio (Fwd) 10.0x
PEG Ratio 9.0
Total Debt to Capital (%) 25.2%
Levered Free Cash Flow $3.892 billion
Enterprise Value / EBITDA 10.6x

Source: Finbox

Company Profile: Walgreens Boots Alliance, Inc.

Walgreens Boots Alliance, Inc. is a large-cap stock with a market capitalization of $52.915 billion and a total enterprise value of $70.462 billion. The company operates in the Consumer Staples sector and Food & Staples Retailing industry.

Walgreens operates as a pharmacy-led health and wellbeing company. It operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores and convenient care clinics. It also provides specialty pharmacy services and mail services; and manages in-store clinics. As of August 31, 2019, this segment operated 9,277 retail stores under the Walgreens and Duane Reade brands in the United States; and 6 specialty pharmacies.

The Retail Pharmacy International segment sells prescription drugs; and health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application. This segment operated 4,605 retail stores under the Boots, Benavides, and Ahumada in the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile; and 606 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home healthcare supplies and equipment, as well as provides related services to pharmacies and other healthcare providers.

This segment operates in the United Kingdom, Germany, France, Turkey, Spain, the Netherlands, Egypt, Norway, Romania, the Czech Republic, and Lithuania. Walgreens Boots Alliance, Inc. was founded in 1901 and is based in Deerfield, Illinois.

 

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.