Can Walgreen meet analysts expectations?
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Walgreens Boots Alliance: Nursing back to health
Walgreens Boots Alliance (WBA) is expected to release its profits for the three months ending in November 2022, and analysts anticipate a year-over-year fall in earnings on lower revenues. The company's earnings situation is well-represented by this well-known consensus view, but how the actual results compare to these projections is a significant variable that could affect the stock price in the near term.
Where do they stand?
If these key figures exceed expectations, the earnings report, which is anticipated to be presented on January 5, 2023, can aid in a rise in the stock price. If they fail, though, the stock can decline.
It is worthwhile evaluating the likelihood of a good EPS surprise even if the sustainability of the current price change and future earnings expectations will largely depend on management's description of business conditions on the earnings call.
Shares of AmerisourceBergen common stock were sold by Walgreens Boots Alliance for an estimated $.8 billion in profit, while AmerisourceBergen concurrently repurchased those shares for an estimated $.2 billion in profit.
The majority of the money raised by the company will go toward paying down debt and supporting the company's strategic goals, which include the definitive agreement for VillageMD to buy Summit Health-CityMD.
In its next report, the largest U.S. pharmacy chain is anticipated to announce quarterly earnings of $1.14 per share, representing a year-over-year drop of -32.1%.
Growth Spurt
Walgreens revealed a $5.2 billion investment in VillageMD, a company that manages primary care offices, last year. By 2027, the firms hope to open up to 1,000 co-located clinics, which are those that are situated next to Walgreens. By the end of this year, the company hopes to have 200 co-located clinics, which is off to a solid start.
Recently, Summit Health-CityMD, a provider of primary, specialised, and urgent care, and VillageMD announced their intention to merge. Across five states, it has more than 370 locations. The $8.9 billion purchase is being financed in part by investments made by Cigna and Walgreens. The $3.5 billion commitment made by Walgreens as part of its component will guarantee that it keeps a 53% controlling interest in VillageMD.
Since the acquisition, Walgreens has increased its growth expectations for its brand-new U.S. healthcare sector. It anticipates revenue of between $14.5 billion and $16 billion by 2025. It had previously predicted sales of no more than $12 billion.
Moving further into healthcare is a strategy in that Walgreens might find success. Competitor CVS made a considerably more significant investment when it paid $69 billion to acquire health insurer Aetna in 2018, and as evidenced by the stock's higher returns in recent years, it has helped the company attract investors and bring stability.
But in this instance, Walgreens isn't simply acquiring a huge business and integrating it into the group. VillageMD is getting smaller at the same time that both Amazon and Walmart are becoming more interested in primary care and may one day become Walgreens' competitors. Walmart has been gradually opening its own health clinics in recent years, and Amazon has announced plans to acquire 1Life Healthcare, often known as One Medical.
One can only hope that earnings meet the estimates anticipated by analysts.
Market Reaction
WBA ended at $37.47, down 0.29%.
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