Few Indicators Flashing Warning Signs for Walgreens Boots Alliance, Inc. (WBA)

Let’s reassess the active stocks with an eye toward WBA stock. Just how should we respond to Monday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 04 March, shares of Walgreens Boots Alliance, Inc. (NASDAQ:WBA) closed lower after a volatile session. The shares dropped -1.87 points or -2.81 percent at $64.74 with a heavy trade volume of 10.852 million shares. After opening the session at $66.96, the shares went as high as $67 and as low as $64.29, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $61.2 billion and now has 945.83 million shares outstanding. Walgreens Boots Alliance, Inc. (WBA) stock has lost -10.41 percent of market value in 21 trading days.

WBA stock has a trailing 3-year beta of 0.87, offering the possibility of a lower rate of return, but also posing less 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 fallen -5.25 percent year to date (YTD) against a decline of -7.78 percent in 12 month’s time. The company’s shares still trade -24.99 percent away from its 1-year high of $86.31 and 9.6 percent up from 52-week low of $59.07. The average consensus rating on the company is 2.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Walgreens Boots Alliance, Inc. (WBA) will probably climb 18.13 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 46.74 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 15.85 percent when compared to the closing price of the stock of $64.74 on Monday, March 04. The lowest price target for the stock is $63 — slightly more than -2.69 percent from WBA’s current share price.

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. Investors will get their next glimpse of WBA’s Q2 earnings on March 28. Analysts are forecasting revenue to climb 4.9 percent to $34.7B in the fiscal second quarter, while earnings are seen soaring by nearly 1.16 percent to $1.75 per share. 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, 8.17 percent next year and continue to increase by 10.12 percent annually for the next 5 years.

Let’s take a look at some insider activity at Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and see the pattern. 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 -17.85 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 -18.86 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 -18.55 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 -17.81 percent since the reporting date. Wilson-Thompson Kathleen now left with a stake of 55.93 thousand WBA stock worth $3.62 million after the insider selling.

The stock is currently hovering around the first support level of $63.69. Below this, the next support is placed in the zone of $62.63. Till the time, the WBA stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 28.63 on daily chart, which may remain a cause for comfort. If the price breaks below $62.63 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $66.4 mark may result into a pull-back move towards $68.05 level.

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 21.42. 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 0.45 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.