3 Analysts Provide Takeaways From Walgreens' Upbeat Results - Walgreens Boots Alliance (NASDAQ:WBA)


Walgreens Boots Alliance Inc. WBA swung to a loss in the third quarter but managed to beat Street expectations.

The Deerfield, Illinois-based company reported that its sales had declined by 5.3% year-over-year to $32.4 billion and adjusted earnings of 80 cents per share, with both figures surpassing the consensus estimates of $32.12 billion and 77 cents per share, respectively.

Here’s a look at some analyst takes from Credit Suisse Group AG CS, Mizuho Securities MFG and Raymond James Financial Inc. RJF.

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Credit Suisse

Analyst AJ Rice maintained a Neutral rating, while reducing the price target from $43 to $42.

Walgreens Boots Alliance’s earnings beat was driven by a lower-than-expected tax rate, Rice said in a note. “More importantly, the company provided FY23 EPS guidance of $4.45-4.65 (cons $4.51), which is better than expected give Covid headwinds,” he added.

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Management also highlighted various actions being taken to return the company to growth, the analyst further mentioned.

Mizuho Securities

Analyst Ann Hynes reiterated a Neutral rating and a price target of $36.

The “greatest wildcard” in Walgreens Boots Alliance’s guidance is “the recapture of scripts in U.S. retail to achieve the baseline +10%-11% growth in U.S. retail ex-COVID” and a “worsening recessionary/inflationary backdrop above what is embedded in guidance,” Hynes wrote in a note.

With the mid-point of the earnings per share guidance for fiscal 2023 coming in-line with Street expectation, “now story becomes about execution.”

Raymond James

Analyst John Ransom maintained a Market Perform rating.

“Specifically, the company reported revenue of $32.4B (Street: $32.1B; RJ: $32.5B), which was down -3.2% y/y on a constant currency (CC) basis, with adj. EBIT of $744M (RJ: $864M), down -39.8% y/y off a tough COVID comp,” Ransom said.

Regarding the guidance, the analyst wrote, “Management is citing a 15-17% headwind from lower COVID contribution ($0.80) vs. our expectation of $1.08, implying that WBA is modeling $0.28 more COVID contribution than our expectations in FY23.”

WBA Price Action: Shares of Walgreens Boots Alliance had risen by 1.19% to $34.05 at the time of publication Friday.


Image and article originally from www.benzinga.com. Read the original article here.