On Monday, Truist Securities revised its price target for Walgreens Boots Alliance (NASDAQ:WBA) shares, decreasing it to $20 from the previous $25. The firm has maintained its Hold rating. This adjustment comes in the wake of Walgreens' second-quarter results and its updated guidance for the year 2024.
The financial institution's decision to lower the price target is a response to the drugstore chain's recent earnings report and forecast revisions. Truist Securities has also modified its earnings per share (EPS) projections for Walgreens for the years 2024 and 2025. The new estimates stand at $3.23 and $3.05, a decrease from the prior estimates of $3.28 and $3.57, respectively.
The analyst from Truist Securities made a statement explaining the rationale behind the changes:
"We are adjusting our estimates to reflect 2Q results and updated 2024 guidance, lowering our 2024 and 2025 adjusted EPS estimates to $3.23 and $3.05 (vs. prior $3.28 and $3.57, respectively). We maintain our Hold rating and have lowered our price target to $20 (vs. prior $25) to reflect our updated estimates."
The revised price target and EPS estimates reflect the firm's latest analysis of Walgreens' financial outlook. The Hold rating suggests that Truist Securities advises investors to maintain their current position in the stock without increasing or decreasing their holdings.
InvestingPro Insights
Walgreens Boots Alliance (NASDAQ:WBA) presents a mixed financial landscape according to the latest data. With a market capitalization of $15.4 billion, the company's valuation reflects a challenging environment, as indicated by a negative P/E ratio of -2.56 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -19.27. Despite this, investors may find solace in the company's revenue growth, which stood at 8.48% for the last twelve months as of Q2 2024, with a quarterly increase of 6.28% in Q2 2024. The gross profit margin remains robust at 18.59%, suggesting that the company is maintaining profitability in its operations.
For those considering dividend income, Walgreens offers a dividend yield of 5.22%, though it's worth noting that the dividend growth has decreased by 47.92% in the same period. The stock price has experienced notable volatility, with a 1-year price total return of -41.96%, indicating significant investor caution. With a fair value estimation by analysts at $22 and an InvestingPro fair value slightly higher at $22.67, there is a potential upside according to these assessments.
InvestingPro Tips highlight that the stock's current price is at 52.38% of its 52-week high, which may interest value investors looking for discounted opportunities. Additionally, with the next earnings date set for June 27, 2024, investors will be keenly awaiting updates that could influence the stock's trajectory. For those seeking to delve deeper into Walgreens' financials and unlock further insights, InvestingPro offers additional tips and metrics. Use the exclusive coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, where you can access a total of 7 additional InvestingPro Tips for Walgreens Boots Alliance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.