Should I invest in Walgreens

**Investing in Walgreens Boots Alliance (WBA) carries significant risk due to the company's current financial and market challenges.** Here's a detailed analysis: 1. **Recent Financial Performance**: - Walgreens reported a net income of $230 million and a diluted EPS of $0.4 for the quarter ending September 30, 2024. This indicates some level of profitability, but it's important to consider the growth rates to gauge the company's health. - The net income year-on-year growth rate stands at 579.17%, which is exceptionally high. However, this could be due to a low base in the previous year rather than indicative of sustainable growth. - The total revenue year-on-year growth rate is 2.64%, which is modest. This suggests that while the company is growing, the pace is slow. - The diluted EPS quarter-over-quarter growth rate is 105.84%, which is substantial. This implies that the company's earnings per share are increasing at a significant rate within a quarter, which could be a positive sign. |Ticker|Name|Net Income year-on-year growth rate|Total Revenue year-on-year growth rate|Diluted EPS QoQ growth rate|Date|code|market_code| |---|---|---|---|---|---|---|---| |WBA.O|Walgreens Boots|579.1666666666667|2.6429479034307497|105.83941605839418|20240930|WBA|185| 2. **Liquidity and Leverage**: - The current ratio is 0.65, which is above the industry average, indicating that the company is able to pay its short-term obligations. However, the quick ratio of 0.32 suggests that the company may face challenges in meeting its short-term obligations if current assets are converted to cash quickly. - The debt-to-equity ratio is 0.58, which is moderate. This suggests that the company is not overly leveraged, which is generally a positive sign. |Ticker|Name|Quick Ratio|Debt-to-Equity Ratio|Current Ratio|Date|code|market_code| |---|---|---|---|---|---|---|---| |WBA.O|Walgreens Boots|0.3213|||20240630|WBA|185| |WBA.O|Walgreens Boots||0.5776409591704472|0.6526|20240930|WBA|185| 3. **Market and Competitive Position**: - Walgreens is facing challenges in the U.S. retail environment and recent pharmacy industry trends. This could impact the company's ability to grow sales and earnings. - The company is undertaking strategic initiatives, such as a U.S. Retail Pharmacy action plan and a strategic review. These could help improve the company's performance over time. 4. **Technical Analysis**: - The stock's 50-day moving average is $13.15, and the 20-day and 10-day averages are $11.43 each. The stock is currently trading below these short-term moving averages, which could be seen as a bearish signal. - The stock has experienced a significant interval percentage change of -30.32% over the past year. This indicates a substantial decline in value, which could be a concern for investors. |Ticker|Name|50-Day Moving Average|20-Day Moving Average|10-Day Moving Average|Date|code|market_code| |---|---|---|---|---|---|---|---| |WBA.O|Walgreens Boots|13.1535|11.4315|11.4280|20240808|WBA|185| 5. **Strategic Developments**: - Walgreens is actively working on strategic initiatives to improve its core business and is focused on retail pharmacy. This could be a positive sign if the company is successful in executing these strategies. - The company has announced a significant multiyear footprint optimization program and is investing in a U.S. Retail Pharmacy action plan. These investments could lead to long-term benefits, but they may also impact short-term profitability. In conclusion, while Walgreens shows some signs of financial stability and potential for growth, the company is facing significant challenges in the U.S. retail environment and has experienced a substantial decline in stock value. Investors should carefully consider these factors and assess the company's ability to navigate its current challenges and deliver sustainable long-term growth before making an investment decision.