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Walgreens’ Fiscal 2Q17 Earnings Overview: Revenue Miss, In-Line EPS

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Dec. 4 2020, Updated 10:53 a.m. ET

Walgreens at a glance

Illinois-based Walgreens Boots Alliance (WBA) reported results for fiscal 2Q17 on Wednesday, April 5, 2017. The results relate to the three-month period ending February 28, 2017 (fiscal year ending August 2017).

WBA’s EPS (earnings per share) stood at $1.36, which was in line with the Wall Street estimates. WBA’s top line, however, missed the consensus estimate by $790 million, falling 2.4% YoY (year-over-year) to ~$29.5 billion.

The company maintained its fiscal 2017 guidance. It continues to expect earnings per share to lie in the $4.90–$5.08 range.

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Stock market reaction to 2Q17 results

Walgreens’ stock price dropped 1.6% to $81.17 as the company reported mixed results. The stock is now trading 8.4% below its 52-week high price and has lost 1.9% YTD (year-to-date).

By comparison, competitor CVS Health (CVS) has fallen 2.4% YTD, while WBA’s acquisition target, Rite Aid (RAD), has shed 48% YTD.

Valuations summary

Walgreens is currently trading at a PE (price-to-earnings) of 15.4x, operating at the lower end of its 52-week PE range of 15.4x–17.8x. Despite trading near the bottom end of its valuations, WBA continues to be more expensive than peers CVS Health (CVS), AmerisourceBergen (ABC), and McKesson (MCK), which are trading at 13.1x, 14.7x, and 12.4x, respectively, to their next-12-month earnings.

The 25 Wall Street analysts covering WBA have an overall bullish stance on the company, with 72% issuing a “buy” and 28% issuing a “hold” on the stock. There are no “sell” recommendations yet on WBA.

Notably, ETF investors seeking to add exposure to WBA can consider the PowerShares QQQ Trust (QQQ), which invests 1.4% of its portfolio in WBA.

Continue reading this series (below) to learn more about Walgreens’ financial performance during the quarter, its year-to-date stock market performance, its dividend policy, its current valuations, and Wall Street’s recommendations.

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