Will Walgreens Start The New Year Off Strong?

When Walgreens Boots Alliance Inc WBA releases its first-quarter fiscal report on Thursday, Deutsche Bank expects to see a gross profit of about $7.4 million — a marker relatively aligned with consensus but $130,000 shy of 2016’s first-quarter benchmark.

Analyst George Hill predicted that the quarter ending in November 2016 yielded a 4-percent growth in revenue from U.S. stores, even as international figures fell an estimated 12 percent and pharmaceutical sales 4 percent relative to their 2016 time frames.

Hill also estimated an EPS report of $1.08, which is 1 cent below consensus.

Rating And Justification

Deutsche Bank reiterated a Buy rating on company shares despite negative public sentiment registered against the retail pharmacy industry. The firm acknowledged a CVS Health Corp CVS earnings shortfall and a potential price battle between Walgreens and CVS for network contracts as turn-offs for investors.

Company Call Expectations

Walgreens is hosting a call on Thursday regarding its first-quarter results and is expected to address questions regarding drug pricing, reimbursement pressure, payer strategies and the deal between Rite Aid Corporation RAD and Fred’s, Inc. FRED.

Company shares rested around $83.20 on Wednesday at time of writing — about $4.80 shy of Deutsche Bank’s $88 price target.