Walgreens Boots Alliance (WBA) Stock Sinks As Market Gains: Here's Why

In the latest trading session, Walgreens Boots Alliance (WBA) closed at $19.98, marking a -0.65% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.1% for the day. On the other hand, the Dow registered a gain of 0.24%, and the technology-centric Nasdaq increased by 0.29%.

Heading into today, shares of the largest U.S. drugstore chain had lost 4.69% over the past month, lagging the Retail-Wholesale sector's gain of 9.88% and the S&P 500's gain of 10.68% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Walgreens Boots Alliance in its upcoming earnings disclosure. On that day, Walgreens Boots Alliance is projected to report earnings of $0.68 per share, which would represent a year-over-year decline of 41.38%. Our most recent consensus estimate is calling for quarterly revenue of $34.75 billion, up 4.1% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.38 per share and revenue of $142.8 billion, indicating changes of -15.08% and +2.67%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Walgreens Boots Alliance. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Walgreens Boots Alliance is currently a Zacks Rank #4 (Sell).

In the context of valuation, Walgreens Boots Alliance is at present trading with a Forward P/E ratio of 5.95. This valuation marks a discount compared to its industry's average Forward P/E of 6.47.

One should further note that WBA currently holds a PEG ratio of 1.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Retail - Pharmacies and Drug Stores industry stood at 1.49 at the close of the market yesterday.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 188, placing it within the bottom 26% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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