Retail pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) is exploring different alternatives for its Shields Health Solutions business, including a potential sale, Bloomberg reported. WBA gained a controlling interest in Shields Health Solutions, a specialty pharmacy enterprise, approximately three years ago.
According to the report, Shields Health Solutions’ business is estimated to be worth over $4 billion. Moreover, private equity firms and healthcare companies could express interest in its potential acquisition.
Walgreens Targets Cost Savings
The move could be a part of its turnaround plan, which includes an evaluation of its existing portfolio, right-sizing costs, increasing cash flow, lowering debt, and freeing up capital. WBA plans to generate $1 billion in cost savings in Fiscal 2024 through workforce reduction and other productivity measures.
Moreover, WBA is prioritizing projects and capital spending to drive sustainable growth in the pharmacy and healthcare businesses. Further, it lowered its quarterly dividend by 48% to strengthen its balance sheet and free up capital.
Is WBA Stock a Buy, Sell, or Hold?
Notably, Walgreens Boots Alliance is struggling to grow its sales and earnings amid macro challenges. Its adjusted earnings per share (EPS) fell about 44% on a constant currency basis in the first quarter of Fiscal 2024 due to lower US retail sales. Further, WBA stock has underperformed the broader markets over the past year and has decreased by about 33%.
WBA stock has a Hold consensus rating based on two Buy, six Hold, and two Sell recommendations. Analysts’ average price target of $25.44 implies 12.67% downside potential from current levels.
