Summary
- WBA stock drops 57% YTD, hitting 27-year lows, amid disappointing Q3 results and profit outlook cuts.
- Challenging environment with weak consumer spending and inflation pressures are impacting Walgreens’ performance.
- Despite facing cash flow crisis and restructuring, WBA posts 2.6% sales growth driven by robust healthcare segment performance.
- Potential for rebound with aggressive cost-cutting and strategic shift to healthcare.
- By year-end, stock price targets range from $8.25 to $23.35, supported by volume price trends and RSI indicators.
Investment Thesis
Walgreens Boots Alliance (NASDAQ:WBA) stock has imploded to 27-year lows after going down by more than 57% year to date. The sell-off has gathered momentum after the drugstore delivered disappointing fiscal third-quarter results and cut its profit outlook for the year. Confirming that the company is poised to close some stores and embark on a restructuring drive underscores the challenging business environment.
Weak consumer spending, exacerbated by heightened inflation, is increasingly making it difficult for Walgreens Boots Alliance to beat expectations. CEO Tim Wentworth has already reiterated that they deal with customers who have become selective and price-sensitive in their purchases. Likewise, pharmaceutical reimbursement pressures are hurting the company’s performance.
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