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Walgreens Beats 1Q18 Sales and Earnings Expectations

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Snapshot of the series

Walgreens Boots Alliance (WBA) reported its results for 1Q18 on Thursday, January 4. The results relate to the three-month period ending November 30, 2017.

The company beat Wall Street earnings and revenue expectations. Adjusted earnings per share stood at $1.28, beating Wall Street by 2 cents. The top line grew 7.9% to $30.74—$390 million more than the Thomson Reuters average consensus revenue estimates.

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Stock market reaction

Walgreens’ stock price plunged 5.2% on January 4 despite the beat, as results were considered largely mixed.

The company is currently trading 19% below its 52-week high price. It lost 12% of its value in 2017. In comparison, competitor CVS Health (CVS) fell 8% while Rite Aid (RAD) fell 76% during the year.

Wall Street recommendations on WBA

Walgreens is covered by 27 Wall Street analysts. It’s rated a “buy” by 59% of analysts and a “hold” by 41% of analysts.

The pharmacy giant is currently trading at a one-year forward PE (price-to-earnings) ratio of 12.7x, which is toward the lower end of its 52-week range of 11.7x–17.1x. CVS Health is also trading at a similar valuation. It’s valued at 12.3x for next-12-months earnings.

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About Walgreens Boots Alliance

Walgreens is the second-largest pharmacy retail chain in the United States, trailing only CVS Health. The company operates around 13,200 retail pharmacy stores in 11 countries and is also among the largest pharmaceutical wholesalers, with more than 390 distribution centers in more than 20 countries.

With a market capitalization of $73.14 billion (as of January 8), Walgreens Boots Alliance has a weight of 3.4% in the SPDR Consumer Staples Select Sector ETF (XLP).

What’s in this series?

This six-part series offers an overview of Walgreens’ first-quarter results. Also, we discuss the company’s stock market performance and Wall Street recommendations.

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