Walgreens Boots Alliance, Inc. ($WBA) Earnings (Q4 FY22)

 Walgreens Boots Alliance, Inc. ($WBA) Earnings and Opinion:


Walgreens is a company in the Healthcare sector and operates in the Pharmaceutical Retailers industry, The company operates as a pharmacy-led health and beauty retail company. Walgreens was founded in 1901 and is currently headquartered in Deerfield, Illinois. The company went public on the stock market in 1927.

Walgreens Boots Alliance Earnings Results:

  • Revenue of $32.449B beating expectations of $32.276B
  • Adj Gross Profit of $6.515B missing expectations of $6.721B
  • Adj Gross Margin of 20.1% missing expectations of 20.67%
  • Adj Diluted EPS of $0.80 beating expectations of $0.77
Opinion:
Walgreens is currently moving up, over 5% in todays trading session. The company reported earnings before the market opened this morning. Walgreens decided to raise the adjusted earnings forecast for the next fiscal year. The company is currently adding primary-care centers to its US locations and gaining more partnerships with health insurers. The stock has been facing a lot of pressure recently, especially with all of the headwinds it has been facing. This earnings report should lay off a little bit of pressure on the company and the guidance will definitely give some reassurance to investors. Now the main discussion is whether they are going to be able to reach the guidance they are putting out. Looking at the financials, we can see that segment revenue was down in all of their segments. However, overall revenue showed a beat compared to estimates. EPS also had a beat compared to estimates, but gross margin and profit both missed on the consensus estimates. Overall, we are seeing a little bit of a decline in growth. I think this is in part of all the revenue they brought in due to Covid 19. One thing that stands out is the EPS growth, which grew 503% on a YOY basis. This is some positive news for the company as they are looking to increase profitability. Looking at valuation, EV/EBITDA sits at 7.00, which is below the median for competitors. P/E ratio is at 3.46, which is extremely below the competitors median. P/FCF is at 8.48, which is also below the competitors median. These metrics show that Walgreens is extremely undervalued, compared to its peers. In my opinion, I am a current shareholder of Walgreens. I think it is a well established company that shows a promising future. It has a great business model and the guidance is promising to hear as an actual investor of the company. It has been a struggle this year with this company, but I am in it for the long-term. Walgreens is definitely a stock you should pick up, especially at the current valuation it is at. They also pay a really nice dividend to get you a little income as well. I am long Walgreens Boots Alliance $WBA. 


*Information from Bloomberg and Yahoo Finance

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