Hold Your Horses: Analysts Sit On Fence For Walgreens Boots Alliance Citing Disappointing Quarter, Outlook

Tuesday, Walgreens Boots Alliance Inc WBA reported weaker-than-expected Q3 profits and lowered profit outlook.

Walgreens has lowered its FY23 adjusted EPS guidance to $4.00-$4.05 from the previous $4.45 - $4.65 (versus the consensus of $4.45) to account for consumer and category conditions, lower COVID-19 contribution, and a more cautious macroeconomic forward view.

Preliminary fiscal 2024 expectations suggest a low- to mid-single-digit adjusted operating income growth, likely to be driven by U.S. Healthcare and U.S. Retail Pharmacy.

Truist Securities maintains a Hold rating. The analyst says that while the cost savings goal was upped and the company is taking steps to address challenges, execution will be critical. It expects improved cash flow generation.

Mizuho Securities lowered WBA adjusted EPS estimates, and the analyst says the miss was worse than expected, driven by a slower ramp in the U.S. Healthcare segment. The analyst noted the disappointing quarter, especially the weak cash flow performance. It keeps the Neutral rating and the price target of $35.

Raymond James reiterates the Market Perform rating. The analyst says that the -$139 million adjusted operating income miss vs. Raymond James model was driven by an $82 million miss in U.S. Healthcare and a $74 million miss in Retail, partially offset by a $9 million beat in International.

Price Action: WBA shares are down 0.66% at $28.83 on the last check Wednesday.