Walgreens Boots Alliance (WBA) Adjusts FY25 Earnings Forecast: Analysts Predict a Potential Stock Rebound
Walgreens Boots Alliance (NASDAQ: WBA) has updated its fiscal year 2025 (FY25) earnings guidance, forecasting earnings per share (EPS) between $1.40 and $1.80, aligning closely with analysts’ expectations of $1.52. This earnings revision gives investors insight into the company’s performance outlook for the year, as it looks to recover and navigate the challenges in the pharmaceutical and retail sectors.
WBA Stock Performance & Key Financial Indicators
On Friday, Walgreens Boots Alliance’s stock opened at $9.22, signaling a potential shift in its price trend. The company currently holds a debt-to-equity ratio of 0.67, a quick ratio of 0.37, and a current ratio of 0.68, indicating its liquidity position. Despite facing struggles, the stock has seen fluctuations over the past year, with a low of $8.08 and a high of $25.63, demonstrating volatility. The 50-day moving average stands at $9.21, while the 200-day moving average is at $9.92, suggesting a period of stagnation. The company’s market capitalization is $7.96 billion, and it has a P/E ratio of -0.92, showing negative profitability. Its beta of 0.64 indicates that it has relatively lower volatility than the broader market.
Strong Q1 Earnings Report Surprises Analysts
Walgreens Boots Alliance surprised the market with a quarterly earnings report of $0.51 per share on January 10, surpassing the expected $0.38 by a solid margin. The company’s revenue for the quarter reached $39.5 billion, beating analysts’ forecast of $37.4 billion. Despite these strong earnings, Walgreens Boots Alliance still posted a negative net margin of 5.85%, a key area to monitor as the company looks to optimize its operations. The return on equity (ROE) for the quarter was a positive 14.23%, reflecting a strong ability to generate profit from shareholder investments.
Attractive Dividend Yield for Shareholders
In conjunction with the earnings announcement, Walgreens Boots Alliance declared a $0.25 quarterly dividend paid on December 12, 2024. The dividend results in an annualized payout of $1.00 per share, delivering a notable yield of 10.85%. This dividend is especially attractive to income-focused investors, although the company’s negative dividend payout ratio of -9.99% could be a concern moving forward.
Analyst Sentiment: Price Target Updates
Despite a strong earnings report, analysts remain cautious regarding Walgreens Boots Alliance’s future performance. Barclays raised its price target from $7.00 to $8.00 but maintained its “underweight” rating on the stock. Truist Financial lowered its target from $13.00 to $10.00, while Morgan Stanley also lowered its price target to $7.00. In contrast, Evercore ISI increased its target from $7.50 to $10.00, and TD Cowen adjusted its target down to $14.00 from $16.00. The stock has a consensus rating of “Hold” from analysts, with an average price target of $12.58, as reported by MarketBeat.
Looking Toward the Future
Walgreens Boots Alliance is actively working on enhancing its operations and diversifying its business model to counteract its financial challenges. While analysts are mixed in their outlook, the company’s strong institutional backing and continued efforts to address key areas of improvement might position it for a potential rebound. The coming quarters will be crucial in determining the stock’s ability to recover and regain its market position. Stay tuned as Walgreens Boots Alliance seeks to navigate its path in the competitive healthcare and retail markets.
