Executive Summary:
Walgreens Boots Alliance is a global leader in retail pharmacy, health, and well-being, with a 175-year heritage of caring for communities. WBA plays a critical role in the healthcare ecosystem through dispensing medicines, improving access to pharmacy and health services, providing high-quality health and beauty products, and offering anytime, anywhere convenience across its digital platforms.

Walgreens Boots Alliance (WBA) reported adjusted net earnings decreased 43.1% to $571 million, or $0.51 per diluted share, compared to the prior-year period. Sales increased 7.5% to $39.5 billion.
Stock Overview:
Ticker | $WBA | Price | $12.52 | Market Cap | $10.82B |
52 Week High | $23.77 | 52 Week Low | $8.08 | Shares outstanding | 864.15M |

Company background:
Walgreens Boots Alliance (WBA) is a global leader in retail pharmacy, health, and well-being, formed in 2014 through the merger of the American company Walgreens and the British company Alliance Boots. The company operates approximately 12,500 locations across the U.S., Europe, and Latin America, offering a wide range of products and services, including prescription drugs, over-the-counter medications, beauty products, personal care items, and health services like immunizations and health screenings.

The company’s roots can be traced back to 1849 when John Boot opened his first herbal remedy store in Nottingham, England. In the United States, Charles R. Walgreen Sr. founded the Walgreens drugstore chain in Chicago in 1901. Both companies grew significantly over the decades, becoming industry leaders in their respective regions. The merger in 2014 created a global powerhouse in the healthcare sector, combining Walgreens’ strong retail presence in the U.S. with Alliance Boots’ expertise in pharmacy wholesaling and international operations.
WBA faces competition from various sources, including other large pharmacy chains like CVS Health and Rite Aid, as well as online retailers like Amazon and Walmart. The company also competes with independent pharmacies and grocery stores that offer pharmacy services. The healthcare industry is constantly evolving, with trends such as telemedicine, personalized medicine, and value-based care impacting the way healthcare is delivered and accessed. WBA is actively working to adapt to these changes and position itself for future growth.
WBA is headquartered in Deerfield, Illinois, United States. The company employs over 311,000 team members worldwide and is committed to improving access to healthcare and enhancing the well-being of the communities it serves.
Recent Earnings:
Walgreens Boots Alliance (WBA) reported its sales increased 7.5% to $39.5 billion, exceeding analyst expectations. Adjusted net earnings decreased 43.1% to $571 million, or $0.51 per diluted share, significantly missing forecasts. WBA attributed the decline in profitability to lower adjusted operating income and a higher adjusted effective tax rate.
While retail pharmacy sales grew, driven by higher prescription volumes and increased customer traffic, the company faced challenges in its healthcare segment. Operating income in the U.S. Healthcare segment declined due to continued investments in primary care and higher operating expenses.
The company adjusted EPS to be in the range of $3.40 to $3.60. The continued challenges in the healthcare segment and the uncertain economic environment, WBA cautioned that achieving the high end of this range would be challenging.
The Market, Industry, and Competitors:

Walgreens Boots Alliance operates in the highly competitive global healthcare and retail market. This includes retail pharmacy, pharmacy wholesale and distribution, and healthcare services. Key market drivers include an aging population, increasing chronic diseases, and a growing emphasis on preventative care and accessible healthcare.
The increasing prevalence of chronic diseases, and the growing demand for convenient and accessible healthcare services. Market research firms have projected varying CAGR (Compound Annual Growth Rate) figures for the global retail pharmacy market, ranging from 3% to 6% or higher depending on the specific segment and region.
Unique differentiation:
Walgreens Boots Alliance faces competition from a variety of sources across its different business segments. In the retail pharmacy space, its primary competitor is CVS Health, another major player with a large network of stores and a growing presence in healthcare services. Other competitors include Rite Aid, a smaller chain with a more regional focus, and grocery stores like Kroger and Walmart, which are increasingly offering pharmacy services.
WBA competes with companies like AmerisourceBergen and Cardinal Health, which supply pharmaceuticals to pharmacies and hospitals. Online retailers like Amazon and online pharmacies are also emerging as competitors, offering convenience and potentially lower prices.
WBA faces competition from a range of healthcare providers, including hospitals, clinics, and telehealth companies, as the healthcare landscape continues to evolve.

Integrated Healthcare Model: WBA is moving beyond traditional pharmacy services by expanding its healthcare offerings. This includes primary care clinics, health screenings, and other services that aim to improve patient outcomes and address broader health needs.
Strong Retail Presence: WBA maintains a significant retail footprint, providing convenient access to its products and services for a large customer base.
Management & Employees:
Timothy Wentworth: CEO & Director
Manmohan Mahajan: Executive VP & Global CFO
Mary Langowski: Executive VP & President of Walgreens Health
Neal Sample: Executive VP & Chief Information Officer
Financials:

Walgreens Boots Alliance Inc. has reported total revenue of approximately $139.08 billion, which reflects a modest increase from $132.7 billion in 2022 and $132.5 billion in 2021. The compound annual growth rate (CAGR) for revenue over these five years stands at about 4.2%. The most recent fiscal year (2024) projected revenues are expected to rise further to between $147 billion and $151 billion, indicating a positive trajectory as the company focuses on stabilizing its retail pharmacy operations and optimizing its footprint.
The net income for fiscal year 2023 was reported at a loss of approximately $3.08 billion, a drop from a profit of $4.34 billion in 2022 and $2.54 billion in 2021. This decline reflects various operational challenges, including increased costs associated with restructuring efforts and a non-cash goodwill impairment charge related to its CareCentrix segment. The CAGR for net income has been negative, primarily due to these losses in recent fiscal years; thus, the company is undergoing a critical turnaround phase to restore profitability.
Walgreens Boots Alliance’s total assets were approximately $63 billion, with total liabilities around $56 billion, resulting in a debt-to-equity ratio that indicates manageable leverage levels for the company. The company focuses on improving cash flow and reducing operating costs as part of its strategy to enhance its financial stability.
The company’s strategic initiatives in fiscal year 2025 aim to address these issues while positioning itself for sustainable long-term growth in an evolving retail pharmacy landscape.

Technical Analysis:
The stock is in a stage 4 decline on the monthly and weekly timeframes, and is in a stage 1 consolidation (neutral) stage on the daily chart. The near term outlook is negative to the $9 – $10 range. We are not buyers of this stock yet.

Bull Case:
Healthcare Services Expansion: WBA’s strategic shift towards healthcare services, including primary care clinics and expanded health screenings, could drive significant long-term growth. Increased patient engagement and a more holistic approach to healthcare could lead to higher revenue streams and improved profitability.
Digital Transformation: WBA’s investments in digital platforms, such as online prescription refills, telehealth services, and personalized health recommendations, could enhance customer experience and drive convenience. This could attract younger demographics and increase customer loyalty.
Cost-Cutting Measures: WBA has been actively pursuing cost-cutting initiatives to improve operational efficiency and enhance profitability. These efforts could lead to margin expansion and improved financial performance.
Bear Case:
Healthcare Segment Challenges: WBA’s expansion into healthcare services, while strategically important, has faced challenges. The company has experienced lower-than-expected profitability in this segment, raising concerns about the long-term viability of this growth strategy.
Operational Challenges: WBA has faced operational challenges, including supply chain disruptions and labor shortages, which can impact profitability and customer satisfaction.
Economic Headwinds: A challenging economic environment, including inflation and potential recessionary pressures, could negatively impact consumer spending and demand for non-essential healthcare products.