Why This Time It’s Different for Walgreens Boots Alliance, Inc. (WBA)?

Analysts at Wolfe Research, assumed coverage of Walgreens Boots Alliance, Inc. (NASDAQ:WBA) with Peer Perform recommendation, according to their opinion released on December 19. Goldman analysts have downgraded their rating of WBA stock from Neutral to Sell in a separate flash note to investors on December 14. Analysts at Pivotal Research Group are sticking to their Hold recommendation. However, on October 15, they lifted target price for these shares to $72 from $60. Analysts at Pivotal Research Group, made their first call for the stock with a Hold rating, according to a research note that dated back to October 15.

In the latest fortnight, short interest in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stock reduced by 17.47%, indicating a significant rise in bullish sentiment. When it comes to determining how a name is viewed by investors, short interest is often a useful tool. The average analyst recommendations at 2.7 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 22.1 million shares. That was 4,677,765 less shares than the total of 26.78 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for WBA at the December 31st settlement jumped to 9,686,663, as compared to 6,534,942 at the December 14th report. That brought days to cover to 2.281247, a 44.32% decrease from the 4.097273 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Walgreens Boots Alliance, Inc. (NASDAQ:WBA)’s prospects. The earliest insider trade took place on 11/20/2018. Schlichting Nancy M parted with a total of 7.05 thousand shares of company at average share price of $78.81. The total for the sales was set at $555.61 thousand. After this transaction, the Director account balance stood at 5.71 thousand shares. The stock lost -9.01 percent since that insider sale. On 11/01/2018, Scardino Kimberly R, SVP, Global Controller and CAO, sold 11.97 thousand shares at a price per share of $79.79. This removed 955.09 thousand shares from the insider’s fortune and the stock saw a -10.13 percent retreat in value since the news became public. This transaction left 0 thousand shares in the SVP, Global Controller and CAO account. On 11/01/2018, Director Foote William C performed a sale transaction worth $217.46 thousand. This sale at $79.48 each has eliminated 2.74 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -9.78 percent decrease since the transaction was reported. The insider now is left with 8.21 thousand shares remaining in the account. Wilson-Thompson Kathleen, who performs the EVP and Global Chief HRO job, sold 52 thousand shares for $4.1 million. The disposal occurred on 10/31/2018 was priced at $78.77 per share. The share price plunged -8.96 percent since the reporting date. Wilson-Thompson Kathleen now left with a stake of 55.93 thousand WBA stock worth $4.01 million after the insider selling.

Walgreens Boots Alliance, Inc. (WBA) is expected to jump by 6.75 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $95-month high price target. This represents a whopping 32.48 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $75, which represents a return potential of 4.59 percent when compared to the closing price of the stock of $71.71 on Friday, January 11. The lowest price target for the stock is $63 — slightly more than -12.15 percent from WBA’s current share price.

The shares are currently floating around the first support level of $71.02. Below this, the next support is placed in the zone of $70.33. Till the time, the WBA stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 44.3 on daily chart, which may remain a cause for concern. If the price breaks below $70.33 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $72.51 mark may result into a pull-back move towards $73.31 level.

WBA shares dropped -0.77 points or -1.06 percent on Friday to $71.71 with a light trade volume of 5.679 million shares. After opening the session at $72.6, the shares went as high as $72.62 and as low as $71.13, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $68.4 billion and now has 953.58 million shares outstanding. Walgreens Boots Alliance, Inc. (WBA) stock has lost -12.35 percent of market value in 21 trading days.

WBA stock has a trailing 3-year beta of 1.01, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $5.3 a share in the trailing twelve months. The stock’s value has surged 4.95 percent year to date (YTD) against a decline of -3.2 percent in 12 month’s time. The company’s shares still trade -16.92 percent away from its 1-year high of $86.31 and 21.4 percent up from 52-week low of $59.07. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Walgreens Boots Alliance, Inc. (WBA) are trading at a P/E ratio of 18.47 times earnings reported for the past 12 months. The industry WBA operates in has an average P/E of 21.46. Its P/E ratio went as low as 14.8X and as high as 30.23 over the 5-year span. Further, it is sporting a 0.51 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.29. 23.1 percent is the gross profit margin for Walgreens Boots Alliance, Inc. and operating margin sits at 4.8 percent. Along with this, the net profit margin is 4 percent.

WBA will be showing off its Q2 earnings on April 03. Analysts are forecasting revenue to climb 5 percent to $34.7B in the next fiscal quarter, while earnings are seen soaring by nearly 1.73 percent to $1.76 per share. History has shown that shares in Walgreens Boots Alliance, Inc. have gone up on 8 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.46 per share, better than the $1.43, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $33.8B, in line with the $33.8B analysts expected. Earnings are estimated to increase by 30.2 percent this year, 8.28 percent next year and continue to increase by 10.12 percent annually for the next 5 years.