Walgreens Boots Alliance (NASDAQ:WBA) is set to announce the first quarter earnings on Friday, and investors will keep an eye on updates regarding reports of potential sale to Sycamore Partners.
Wall Street expects the drugstore operator to post EPS of $0.36, indicating a 42.4% Y/Y decline, while revenue is expected to increase 1.9% Y/Y to $37.42 billion during the quarter.
Despite beating sales expectations in Q4, the company is facing headwinds due to ongoing execution challenges, footprint optimization and consumer weakness.
“Additional WBA headwinds could be driven by the weaker flu season to date (y/y), with outpatient visits for influenza like illness tracking below last year's levels,” noted Morgan Stanley analyst Erin Wright.
Seeking Alpha's Quant Ratings, Wall Street and Seeking Alpha analysts are cautious about the company and recommended it as a Hold.
Seeking Alpha analyst Daniel Schönberger said despite the low stock price suggesting undervaluation, Walgreens' profitability struggles and potential dividend cuts make it a risky investment. Additionally, the company’s sustainability is questionable due to negative free cash flow and significant debt levels.
Over the last two years, WBA has beaten EPS estimates 63% of the time and has beaten revenue estimates 100% of the time.
Over the last three months, EPS estimates have seen one upward revision versus nine downward moves. Revenue estimates have seen four upward revisions against three downward moves.
Wallgreens was one of the worst performing S&P 500 stocks in 2024 as its shares declined nearly 65%.
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