Market Overview

JPMorgan Downgrades Walgreens, Says Near-Term Growth Likely To Remain Challenged

JPMorgan Downgrades Walgreens, Says Near-Term Growth Likely To Remain Challenged

Walgreens Boots Alliance Inc (NASDAQ: WBA) is scheduled to announce its fiscal fourth-quarter results on Oct. 28.

The company is likely to record a high-single digit decline in fiscal 2019 and its adjusted operating profit growth may remain under pressure in the near term, according to JPMorgan.

The Analyst

JPMorgan’s Lisa Gill downgraded Walgreens Boots Alliance from Overweight to Neutral, establishing a price target of $63.

The Thesis

Walgreens is taking longer to realize growth under its current strategy, and Gill said there is lack of clarity into the roadmap to improvement and limited catalysts in the near term.

Management had expressed optimism in delivering mid- to high-single digit growth in adjusted earnings per share. The analyst mentioned, however, there is limited clarity into the timing and key milestones in achieving this target.

Gill expects the company to report fourth-quarter adjusted earnings at $1.41 per share, meeting the consensus estimate. While gross margins may continue to contract, focus would be on signs of the trend improving versus recent quarters.

The analyst lowered the fiscal 2020 earnings estimate from $5.98 per share to $5.93 per share. Expecting the stock to remain “a show-me story” in fiscal 2020, Gill wrote that there are “better opportunities for upside in other companies within our coverage universe at the current time.”

Price Action

Shares of Walgreens declined 1.6% to $54.43 at time of publishing on Wednesday.

Related Links:

4 Pharma Companies Settle Opioid Lawsuits Ahead Of Trial With Ohio Counties; 2,300 Cases Remain

'Meaningful First-Mover Advantage': SmileDirectClub Analysts Sound Optimistic Note After Rough First Month

Photo credit: Mike Mozart, Flickr

Latest Ratings for WBA

Oct 2019DowngradesOverweightNeutral
Oct 2019MaintainsUnderperform
Aug 2019MaintainsEqual-Weight

View More Analyst Ratings for WBA
View the Latest Analyst Ratings

Posted-In: JPMorgan Lisa GillAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (WBA)

View Comments and Join the Discussion!

Latest Ratings

TORCCantor FitzgeraldDowngrades3.0
CIDMCanaccord GenuityMaintains1.5
TDGCanaccord GenuityMaintains620.0
DLPNCanaccord GenuityMaintains1.6
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Telegram Open Network Hits With A Big (And Ugly) Splash

Knight-Swift Said Its Earnings Would Be Weak; Actual Numbers Back That Up