We take a closer look at the current developments surrounding the stock of Walgreens Boots Alliance (WBA), a giant in the pharmacy and drugstore market.

Walgreens Boots Alliance: At a Historical Low Walgreens was founded in 1901 and is known for its large pharmacy chains in the US, UK, and other countries. However, the company is currently under significant pressure. WBA’s stock price has fallen sharply since its all-time high of $97.30 and is currently at its lowest point in 40 years. This is partly due to increased competition, price pressure, and the need to adapt to the rapidly changing healthcare and retail environment.

Six-month chart of Walgreens Boots Alliance Walgreens is plummeting, but stops exactly at the blue 50-day line. (Source: Stock Screener)

Strategic Turns and New Leadership In October 2023, Tim Wentworth was introduced as the new CEO. Wentworth, former CEO of Express Scripts and Evernorth, is known for his success in building a healthcare provider. Under his leadership, WBA has implemented significant cost-cutting measures, including adjusting operating hours to local market trends and implementing AI to optimize the supply chain.

Financial Performance and Outlook The company reported its Q1 figures on January 4. Despite a revenue growth of 8.7%, adjusted earnings per share decreased by 44%. Surprisingly, the company announced a nearly 50% cut in quarterly dividend, initially disappointing investors.

A potential sale of the British drugstore chain Boots, which could bring in up to $8.8 billion, as well as a London IPO, have been considered. These steps could have a positive impact on the stock price.

Conclusion Walgreens Boots Alliance is at a critical point. With a new CEO at the helm, more efficient operating strategies, and a possible separation from Boots, new opportunities may arise. While the recent dividend cut may have disappointed some investors, the stock is currently attractively valued.

It remains to be seen how the strategic changes and potential sale of Boots will affect the company’s long-term performance. Investors should closely monitor developments and consider whether now is the right time to enter the stock.