Walgreens Boots Alliance (WBA) stock is down nearly 25% Thursday to trade at a 27-year low after the pharmacy retail chain missed earnings expectations for its fiscal third quarter and cut its outlook for the full year.
In the three months ended May 31, Walgreens' revenue increased 2.6% year-over-year to $36.4 billion, which included a 2.3% year-over-year rise in its domestic retail pharmacy segment to $28.5 billion. The company said earnings per share (EPS) slumped 36.6% to 63 cents from the year-ago period.
"We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins," Walgreens CEO Tim Wentworth said in a statement. "Our results and outlook reflect these headwinds, despite solid performance in both our International and U.S. Healthcare segments."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were mixed compared with analysts' expectations. According to Yahoo Finance, Wall Street was anticipating revenue of $35.9 billion and earnings of 68 cents per share.
As a result of "challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment," Walgreens cut its full-year earnings guidance. The company now anticipates EPS in the range of $2.80 to $2.95, down from its previous guidance of a range of $3.20 to $3.35.
Is Walgreens stock a buy, sell or hold?
It's been a rough stretch for the former Dow Jones stock, which was replaced in the 30-stock index by Amazon (AMZN) earlier this year. Indeed, shares were down nearly 40% heading into today's session, so it's unsurprising that Wall Street is on the sidelines when it comes to WBA.
According to S&P Global Market Intelligence, the average analyst target price for WBA stock is $21.52, representing implied upside of more than 82% to current levels. Despite the significant implied upside, the consensus recommendation is a Hold.
Given the weak quarter and reduced full-year outlook, it would not be a surprise to see analysts downwardly revise their price targets on WBA stock in the days and weeks ahead.
Related Content
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and MoreWhat is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
-
Want to Give Money to Your Adult Children? 10 Things You Should KnowIt’s less taxing to give money to your adult children than you might think. A good plan can help you avoid certain pitfalls — and drama.
-
Potential Ripple Effects of Taxing Unrealized Capital GainsThe proposed tax on unrealized gains would be limited to those with a net worth above $100 million, but some see a broad impact on markets and businesses.
-
Succession Musts: Thoughtful Planning and Frank DiscussionsWhen it comes to passing on the family business, you don't want anyone to be surprised about who will control or inherit the business after the owner's death.
-
How to Navigate Finances as a Blended FamilyIf you’re planning to become part of a blended family, consider these financial issues as you and your spouse start a new life.
-
Here's How to Find Your Way Out of the Inherited IRA MazeTo navigate complex rules on inherited IRAs and RMDs, start by breaking down key terms and common scenarios. A clearer picture of your next steps will emerge.
-
Stock Market Today: Stocks Rally on Strong Netflix EarningsMega-cap tech leads the charge as markets rise for a sixth straight week.
-
Why American Express Earnings Have the Dow Stock LowerAmerican Express is the worst Dow Jones stock Friday after the payments giant reported a top-line miss in its third quarter. Here's what you need to know.
-
CVS Stock Falls After Karen Lynch Ouster: What to KnowCVS stock is lower Friday after the embattled healthcare company said Karen Lynch is out as CEO, effective immediately
-
Netflix Stock Jumps to the Top of the S&P 500 After Earnings. Here's WhyNetflix stock is spiking Friday after the streaming giant beat third-quarter expectations and gave an upbeat fourth-quarter outlook.
