|
Related Topics
|
Category: Stock Market and Walgreens Boots Alliance
Date: 29 October 2019 Stock Price: $55.80 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Walgreens Boots Alliance, a wholesale and retail pharmacy company active in 25 countries and employing more than 440 000 people in over 18 700 stores.
|
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is a global leader in retail and wholesale pharmacy, touching millions of lives every day through dispensing and distributing medicines, its convenient retail locations, digital platforms and health and beauty products. The company has more than 100 years of trusted health care heritage and innovation in community pharmacy and pharmaceutical wholesaling.
Including equity method investments, WBA has a presence in more than 25 countries, employs more than 440,000 people and has more than 18,750 stores. WBA’s purpose is to help people across the world lead healthier and happier lives. The company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. The company’s businesses have been recognized for their Corporate Social Responsibility. Walgreens was named to FORTUNE* magazine’s 2019 Companies that Change the World list and Boots UK was recognized as Responsible Business of the Year 2019-2020 by Business in the Community.
WBA is included in FORTUNE’s 2019 list of the World’s Most Admired Companies, ranked first in the food and drugstore category. This is the 26th consecutive year that WBA or its predecessor company, Walgreen Co., has been named to the list.
Including equity method investments, WBA has a presence in more than 25 countries, employs more than 440,000 people and has more than 18,750 stores. WBA’s purpose is to help people across the world lead healthier and happier lives. The company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. The company’s businesses have been recognized for their Corporate Social Responsibility. Walgreens was named to FORTUNE* magazine’s 2019 Companies that Change the World list and Boots UK was recognized as Responsible Business of the Year 2019-2020 by Business in the Community.
WBA is included in FORTUNE’s 2019 list of the World’s Most Admired Companies, ranked first in the food and drugstore category. This is the 26th consecutive year that WBA or its predecessor company, Walgreen Co., has been named to the list.
Overview of Walgreen Boots Alliance's 4th quarter 2019 earnings report
Data below refers to quarterly data unless specified otherwise:
- Net sales: $33.954 billion (up from $33.442 billion for the same period of the previous year)
- Net sales increased by 1.53% over the last 12 months
- Cost of sales: $26.727 billion (up from $25.867 million for the same quarter of the previous year)
- Cost of sales increased by 3.3% over the last 12 months
- Net income: $677 million (down from $1.512 billion from for the same period of the previous year)
- Diluted earnings per share: $0.75
- PE ratio of Walgreens Boots Alliance: 18.6
- Quarterly dividend declared: $0.39
- Dividend yield: 3.27%
- Diluted weighted-average shares outstanding: 900.7 million (down from 977.9 million for the same period of the previous year)
- Cash and cash equivalents $1.023 billion
- Cash and cash equivalents per share: $1.31
- Cash and cash equivalents makes up 2.03% of Walgreens Boots market capital
- Cash and cash equivalents makes up 9.3% of Walgreens Boots total assets
- Accounts receivable: $7.226 billion
- Accounts receivable makes up 10.68% of Walgreens Boots total assets
- Inventories: $9.333 billion
- Inventories makes up 13.8% of Walgreens total assets
- Stockholders equity in Walgreens: $24.152 billion
- Stockholders equity per share:$26.81
- Walgreens Boots is trading at 2.08 times its stockholders equity which is within the expected range of between 2 and 4 that most firms tend to trade at.
- Cash generated from operations (for the full fiscal year): $5.594 billion
- Cash generated from operations per share (for the full fiscal year): $6.21
Walgreen Boots Alliance's management commentary on their 4th quarter 2019 results
DEERFIELD, Ill.--(BUSINESS WIRE)-- Walgreens Boots Alliance, Inc. (Nasdaq: WBA) today announced financial results for the fiscal year and fourth quarter that ended August 31, 2019.
Executive Vice Chairman and CEO Stefano Pessina said, “We are pleased to report fiscal 2019 results in line with our previously stated guidance despite a challenging operating environment. We are also making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth. While we still face headwinds, I am encouraged by the improvement in U.S. comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow. We are introducing guidance for fiscal 2020 adjusted earnings per share, which we expect will be roughly consistent with fiscal 2019 at constant currency rates - very much in line with our expectations.”
Fiscal 2019 Walgreens Boots Alliance highlights, year-over-year
Executive Vice Chairman and CEO Stefano Pessina said, “We are pleased to report fiscal 2019 results in line with our previously stated guidance despite a challenging operating environment. We are also making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth. While we still face headwinds, I am encouraged by the improvement in U.S. comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow. We are introducing guidance for fiscal 2020 adjusted earnings per share, which we expect will be roughly consistent with fiscal 2019 at constant currency rates - very much in line with our expectations.”
Fiscal 2019 Walgreens Boots Alliance highlights, year-over-year
- Sales increased 4.1 percent to $136.9 billion, up 5.8 percent on a constant currency basis
- Operating income decreased 20.5 percent to $5.0 billion; Adjusted operating income decreased 9.6 percent to $6.9 billion, down 8.6 percent on a constant currency basis
- EPS decreased 14.6 percent to $4.31; Adjusted EPS decreased 0.5 percent to $5.99, up 0.5 percent on a constant currency basis
- Sales increased 1.5 percent to $34.0 billion, up 2.6 percent on a constant currency basis
- Operating income decreased 37.0 percent to $878 million; Adjusted operating income decreased 11.9 percent to $1.6 billion, down 11.1 percent on a constant currency basis
- EPS decreased 51.4 percent to $0.75; Adjusted EPS decreased 3.7 percent to $1.43, down 2.9 percent on a constant currency basis
- Company raised its annual cost savings target from in excess of $1.5 billion to in excess of $1.8 billion by fiscal 2022
- Company introduced guidance of roughly flat growth in fiscal 2020 adjusted EPS, on a constant currency basis
Walgreens Boots Alliance (NASDAQ: WBA) stock price history
The image below, obtained from Google, shows the stock price history of Crane Co. over the last 5 years. And its not been a good time for Walgreens stockholders. 5 years ago the stock was trading at around $66.20 a stock and its currently trading at $55.80 a stock. That's a loss of -15.7% provided to Walgreen stockholders over the last 5 years. The opportunity cost of holding Walgreens stock instead of say Netflix that returned over 300% over a 5 year period becomes very significant.
The stock of Walgreens is trading at a lot closer to its 52 week low of $49.03 than it is to its 52 week high of $86.31, which to us is a indication that the short term sentiment and momentum of Walgreens stock is very negative at this point in time.
The stock of Walgreens is trading at a lot closer to its 52 week low of $49.03 than it is to its 52 week high of $86.31, which to us is a indication that the short term sentiment and momentum of Walgreens stock is very negative at this point in time.
Recent coverage of Walgreen Boots Alliance
The extract below discusses the latest news regarding Walgreens Boots Alliance as obtained from TheStreet.com
Walgreens Boots Alliance (WBA - Get Report) posted stronger-than-expected fourth quarter earnings Monday while setting out near-term forecasts for profit growth and boosting its target for planned cost savings. Walgreens said adjusted earnings for the three months ending in September, the drugstore chain's fiscal fourth quarter, came in at $1.43 per share, down 3.4% from the same period last year and two cents ahead of the Street consensus forecast. Group revenues, Walgreens said, rose 1.5% to $34 billion, topping analysts' forecasts of a $33.888 billion tally.
Looking into 2019, Walgreens said it sees flat adjusted earnings growth, with a range of plus or minus 3%, and boosted the estimate from its ongoing cost savings plan by 20%, to $1.8 billion, by 2022. "We are making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth," said CEO Stefano Pessina. "While we still face headwinds, I am encouraged by the improvement in U.S. comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow."
Read the full article here
Walgreens Boots Alliance (WBA - Get Report) posted stronger-than-expected fourth quarter earnings Monday while setting out near-term forecasts for profit growth and boosting its target for planned cost savings. Walgreens said adjusted earnings for the three months ending in September, the drugstore chain's fiscal fourth quarter, came in at $1.43 per share, down 3.4% from the same period last year and two cents ahead of the Street consensus forecast. Group revenues, Walgreens said, rose 1.5% to $34 billion, topping analysts' forecasts of a $33.888 billion tally.
Looking into 2019, Walgreens said it sees flat adjusted earnings growth, with a range of plus or minus 3%, and boosted the estimate from its ongoing cost savings plan by 20%, to $1.8 billion, by 2022. "We are making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth," said CEO Stefano Pessina. "While we still face headwinds, I am encouraged by the improvement in U.S. comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow."
Read the full article here
Walgreens Boots Alliance (NASDAQ: WBA) latest stock valuation
So what is Walgreens stock worth based on the release of their latest earnings report? Based on Walgreens latest earnings report and their guidance provided our valuation models provide a target (full value) price for the stock of Walgreens at $48.40 a stock and therefore believe the stock of Walgreens is overvalued
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $48.40. Therefore we believe a good entry point into Walgreens stock is at $43.60 or below. We expect the stock of Walgreens to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $48.40. Therefore we believe a good entry point into Walgreens stock is at $43.60 or below. We expect the stock of Walgreens to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
Next earnings release date for Walgreens Boots Alliance
It is expected that Walgreens 1st quarter results of their 2020 fiscal year will be released in late January 2020 to early February 2020