Walgreens Boots Alliance (WBA) Outpaces Stock Market Gains: What You Should Know

August 27, 2021 3 min read

This story originally appeared on Zacks

Walgreens Boots Alliance (WBA) closed at $48.48 in the latest trading session, marking a +1.34% move from the prior day. This move outpaced the S&P 500’s daily gain of 0.88%.

Heading into today, shares of the largest U.S. drugstore chain had gained 1.7% over the past month, outpacing the Retail-Wholesale sector’s loss of 4.22% and the S&P 500’s gain of 1.2% in that time.

Investors will be hoping for strength from WBA as it approaches its next earnings release. In that report, analysts expect WBA to post earnings of $1 per share. This would mark a year-over-year decline of 1.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $33.18 billion, down 4.49% from the year-ago period.

WBA’s full-year Zacks Consensus Estimates are calling for earnings of $4.75 per share and revenue of $131.76 billion. These results would represent year-over-year changes of +0.21% and -5.58%, respectively.

Investors should also note any recent changes to analyst estimates for WBA. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. WBA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, WBA is currently trading at a Forward P/E ratio of 10.07. For comparison, its industry has an average Forward P/E of 10.49, which means WBA is trading at a discount to the group.

We can also see that WBA currently has a PEG ratio of 1.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Retail – Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.58 based on yesterday’s closing prices.

The Retail – Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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