In a recent turn of events, Walgreens Boots Alliance (NASDAQ:WBA)'s stock has seen an uptick following a series of management shifts. J.P. Morgan analyst Lisa Gill has upgraded the shares and increased her stock price target to $30 from $27, citing confidence in the newly appointed CEO Tim Wentworth.
Wentworth's experience from Express Scripts and Cigna Group (NYSE:CI) is seen as a significant factor for this newfound optimism. The stock had been on a downward trajectory due to the departure of former CEO Rosalind Brewer, a reduced profit outlook, and weaker-than-expected earnings for fiscal 2023. Yet, with Wentworth's appointment, the atmosphere on Wall Street appears to be changing.
According to InvestingPro data, Walgreens Boots Alliance has a market cap of $18,369.54 million and trades at a P/E ratio of -5.95. Despite not being profitable over the last twelve months, as indicated by InvestingPro Tips, the company has a history of maintaining its dividend payments, having raised them for 47 consecutive years. This aligns with Gill's anticipation that Walgreens will trim its quarterly dividend of 48 cents per share and prioritize debt reduction.
Currently, the company trades at 6.2 times forward earnings, which is below its five-year average of 8.7 times. Even though the firm's stock has taken a hit over the last six months, with a 38.8% decrease in price, InvestingPro's fair value estimate stands at $14.97, suggesting potential for growth.
On the other hand, Mizuho Securities analyst Ann Hynes maintained her Neutral rating on the stock. Amidst weaker earnings expectations, she lowered her price target to $23 from $25. As of today, Walgreens shares were trading at $21.99 in premarket trading.
This leads us to one of the InvestingPro Tips, highlighting that Walgreens is a prominent player in the Consumer Staples Distribution and retail industry, with a revenue growth of 4.81%. Despite short-term obligations exceeding liquid assets, the firm's net income is expected to grow this year. However, it's worth noting that six analysts have revised their earnings downwards for the upcoming period.
For more insights and metrics, you can check out InvestingPro, which offers 13 additional tips for Walgreens Boots Alliance and other companies.
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