Walgreens Boots Alliance’s (NASDAQ:WBA) fiscal Q2 outcomes on Thursday will seemingly replicate the headwinds the corporate has confronted lately, notably sluggish foot site visitors and gentle worldwide gross sales. The Steet is anticipating the drug-store chain to earn a revenue of simply $0.83 per share which is considerably decrease than $1.16 in the identical quarter final yr, however gross sales ought to present a modest 3% achieve year-over-year.
UBS just isn’t anticipating any surprises to the consensus forecasts however is searching for the VillageMD retailer closures and decrease tax charge to offset any adverse influence on retailer gross sales. Steerage for fiscal 2024 will almost certainly be reiterated at $3.20 to $3.50 per share, leaving cost-cutting steering because the one metric anticipated to generate curiosity. UBS is anticipating the corporate to bump up its cost-reduction steering from $1B to raised align with its EPS steering.
“We notice that the brand new administration group seems to be very targeted on enhancing operational effectivity, and we might not be shocked if the annual financial savings determine was raised once more (whole dimension unknown, however doubtlessly into the a whole lot of tens of millions given the fee base), offering extra help to full yr EPS,” UBS analyst Kevin Caliendo stated in analysis notice on Monday.
For rival CVS Well being Corp (CVS) the latest quarter proved a lot much less difficult than for Walgreens (WBA) with CVS (CVS) beating each revenue and gross sales expectations. A 16% achieve in income in its Well being Care Advantages phase helped offset the rising prices in its Medicare Benefit enterprise. However regardless of an upbeat This autumn, CVS (CVS) is guiding for a difficult 2024 amid a spike in medical prices, the most recent well being insurer to chop forecasts attributable to rising value traits.
For Walgreens’ healthcare phase, present FY24 steering requires break-even healthcare EBITDA. UBS’s Caliendo assumes a steady “cadence of enchancment” for VillageMD, as with the probability that the corporate has already closed the least worthwhile shops, Walgreens (WBA) may see at the very least $5M to $15M in incremental EBIT profit versus beforehand anticipated.
UBS maintained its Impartial ranking on Walgreens Boots Alliance (WBA) and $25 value goal.
The Avenue is generally Impartial on Walgreens (WBA) with Wall Avenue analysts and Looking for Alpha’s Quant ranking viewing the inventory as a Maintain. Looking for Alpha authors charge Walgreens (WBA) as a Purchase.
