Shares of retail pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) gained in pre-market trading after announcing its first-quarter results. This was despite an adjusted earnings decline of 43.1% year-over-year to $0.66 per share, as it still surpassed analysts’ estimates of $0.63 per share. The pharmacy chain’s first-quarter sales increased by 10% year-over-year to $36.7 billion and were above Street estimates of $34.88 billion. However, Walgreens Boots Alliance slashed its quarterly dividend by 48% to $0.25 per share.
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Walgreens Boots Alliance’s CEO, Tim Wentworth, explained, “We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities.”
Looking forward, WBA reiterated FY24 adjusted earnings in the range of $3.20 to $3.50 per share, “with underlying earnings growth more than offset by lower sale and leaseback contribution, a higher tax rate, and lower COVID-19 contribution.” Furthermore, WBA expects its U.S. healthcare businesses to see an adjusted EBITDA in the range of -$50 million to $50 million.
Is WBA a Buy, Sell, or Hold?
Analysts remain sidelined about WBA stock with a Hold consensus rating based on six Holds and two Buys and Sell each. Over the past year, WBA has slid by more than 20%, and the average WBA price target of $25.33 implies a downside potential of 0.9% at current levels.
