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Can Walgreens Exceed Analyst Expectations in Fiscal 4Q17?

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WBA ready to post fiscal 4Q17 results

Walgreens Boots Alliance (WBA) is slated to release its fiscal 4Q17[1. fiscal 4Q17 ended August 31, 2017] results on Wednesday, October 25, 2017. The pharmacy giant is expected to report an increase of $1.21 in earnings per share (or EPS) for 13.1% growth year-over-year (or YoY). WBA’s total sales are expected to reach $29.6 billion, a 4.6% increase over its fiscal 4Q16 sales.

Walgreens has not missed its consensus earnings forecasts in the last 12 consecutive quarters. However, it fell short of revenue estimates in ten of these 12 quarters.

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Valuations

Walgreens is currently trading at a one-year forward earnings multiple of 12.5x versus a three-year average of 18.0x. CVS Health (CVS), America’s largest drugstore chain, also has similar valuations. CVS traded at 12.0x on October 17, 2017.

About Walgreens Boots Alliance

Walgreens is the second-largest pharmacy retail chain in the US, trailing only CVS Health. The company was formed by the merger of Walgreens and Alliance Boots in December 2014.

Walgreens Boots Alliance (WBA) currently operates ~8,100 stores in the United States and ~4,500 stores overseas. The company is poised to garner a larger piece of the US drug retail market with its acquisition of 1,932 Rite Aid (RAD) stores.

With a market capitalization of ~$72.1 billion on October 17, 2017, Walgreens Boots Alliance has a weight of 3.5% in the SPDR Consumer Staples Select Sector ETF (XLP).

Series overview

In this series, we’ll see what analysts are estimating for Walgreens Boots Alliance’s 4Q17 earnings. We’ll also do a quick recap of the company’s most recent earnings results, year-to-date stock market performance, and Wall Street recommendations.

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