Walgreens Boots Alliance Inc. (WBA: NSD) is considering selling its subsidiary, Shields Health Solutions. This move is aimed at simplifying operations and giving more attention to its core business sectors. If the sale goes through, it could have a significant impact on the company’s future.
Stock Target Advisor’s Analysis on Walgreens:
Analysts identified Walgreens’ stock (WBA: NSD) on hold, valuing the company’s stock at $27 – a prospective price change of 19.57% in the next 12 months. This is relatively higher than the $26.64 average analyst target price. Walgreens’ last closed stock price was $22.58. Interestingly, despite negative weekly and monthly trends (-0.29% and -3.64%, respectively), Walgreens’ stock price has dropped -37.10% over the past year, revealing a complicated picture.
Stock Target Advisor has identified several positive and negative signals from Walgreens. On the positive end, there is low volatility, underpricing compared to the book value, positive cash flow, superior returns on assets, high market capitalization, and good dividend returns. However, on the flip side, Walgreens has below median total returns and is overpriced on a cash flow basis. Being highly leveraged with negative free cash flow also raises concerns.
Pharmaceutical retailers in the “NSD” exchange, also have an average ‘Hold’ rating, as per Stock Target Advisor. Walgreens still emerges as one of the most significant players in the sector.
Walgreens: An Overview of Quarterly and Annual Financial Results
A look at Walgreens’ recent quarterly and annual financial figures paints a clearer picture of its financial condition. Despite posting $35.42 billion in revenue for the quarter ending in August 2023, the company recorded a net loss of $180 million, reflecting a profit margin of -0.51%. Furthermore, the net loss deepened to $3.08 billion for the year ending in August 2023, despite recording $139.08 billion in revenue.
Conclusion:
The potential sale of Shields Health Solutions may align with Walgreens’ strategic shift and the broader trend in healthcare towards streamlining operations.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
