Walgreens Boots Alliance Today
Walgreens Boot Alliance
As of 4:00 pm ET
- 52 week range
- $8.08
▼
US$24.93
- Dividend yield
- 8.50%
- Target price
- $12.58
Walgreens Boots Alliance has charts, seller activity and recovery prospects. NASDAQ: WBA monitoring stocks for a recovery that is likely to begin this year. Trading at just six times earnings, this high-yield, high-value stock has hurdles and obstacles to overcome, but its share price has nowhere to go but up.
Details for 2024 include slower growth, warnings and store closure plans that have weighed on the near-term outlook but improved the long-term. Store closures and cuts to other bulky assets are not a surprise; management gritted its teeth when it made its decision, and it was smart. As a result, consensus forecasts call for earnings to taper this year, remain stable in 2026 and return to growth shortly thereafter.
Increased Volume Indicates Strong Buying in Walgreens Shares
Technical action is important due to chart patterns and, more importantly, volume. Volume indicates market interest and strength and increased significantly in the summer of 2023 and again in the summer of 2024. The increase in volume in the summer of 2024 coincides with a sharp downward slide driven by bad news, signaling a market capitulation by retail traders that was met with an influx of seller capital.
Proponents of the sell-off, including insiders, institutions and analysts, are showing strong support and providing a tailwind for prices and a catalyst for the market. Insiders only own a small percentage of the shares, but haven’t sold any shares since the first quarter of 2024. The latest action is a purchase by two directors and a CFO, which is consistent with institutional activity. Institutional activity is bullish, with the balance being purchased for four consecutive quarters in 2024. Collectively, they own nearly 70% of the shares, and the broad ownership provides a strong base of support and strong tailwinds.
The catalyst is analyst sentiment. The consensus as reported by MarketBeat fell to a “Reduce” level at the end of 2024, but the trend is to the upside. There is a possibility that the ratings cycle will begin later in 2025. Sentiment is on the upside as only four ratings are at Sell, about 26% of the 15 ratings tracked, while 60% are at Hold and 13% at Buy. Likewise, the price target range suggests this stock is trading near its low with 35% consensus upside potential.
Walgreens will make big changes in 2025
Walgreens is on track for a major turnaround in 2025, and one opportunity is to sell itself. Late 2024 news includes rumors of a debt-financed proposal that has yet to materialize. Opportunity for investors is the premium associated with the supply, whatever it may be, and its impact on price action. However, there is a risk as industry insiders are hesitant and do not expect the deal to close. The question is what Walgreens will do next, and that’s what the private equity firm is likely to do: sell Boots and focus on its core retail and healthcare businesses in the US. Boots’ fourth-quarter revenue was just 15% of net revenue, which isn’t a huge loss or a drag on net growth, so there’s a benefit.
Dividends are unlikely to change. The company has already reduced distribution, facilitating a downward flow in early 2024, and can sustain itself at current levels with or without Boots. With Boots in the portfolio, the payout ratio is approximately 65% of earnings forecasts for 2025 and 2024. This will change with Boots exiting the portfolio, but capital will be injected into the balance sheet to offset the increase until profit growth returns.
Double bottom for the Walgreens Boots alliance
Walgreens’ chart shows a bottom formed in 2024, starting with the June capitulation. This was followed by two tests of support that confirmed the same level, and a subsequent rise to a higher support level later in the year. Actions in 2025 are consistent with support at a new, higher level and are set to increase.
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