Is WBA's Q2 2025 EPS forecast too conservative?

**Walgreens Boots Alliance's (WBA) Q2 2025 EPS forecast is not overly conservative**. Here's why:

1. **Actual EPS Performance**: WBA's adjusted EPS for Q2 2025 was $0.63, which is the figure that best compares to the forecast. This is a significant figure because it represents a 47.5% decline from the previous year's $1.20 EPS. This substantial decrease is primarily attributed to factors such as the adjusted effective tax benefit in the prior year, lower retail sales, and fewer gains from sale leasebacks compared to the same period the year before.
2. **Revenue Growth**: Despite the drop in EPS, WBA saw a 4.1% year-over-year revenue growth, reaching $38.6 billion, surpassing analyst expectations. This indicates that the company's top-line performance is robust, which is a positive sign for its financial health.
3. **Analyst Expectations**: Analysts had anticipated a slight dip in EPS, with expectations slightly below the actual EPS of $0.63. This suggests that the forecast was not overly conservative but rather in line with the market's expectations.
4. **Market Reaction and Future Outlook**: Despite the EPS decline, WBA's stock performance has not been negatively impacted, and analysts maintain a "Hold" recommendation with an average price target suggesting potential upside. This optimism is based on the belief that the company's strategic shifts and cost management will lead to long-term value creation.

In conclusion, WBA's Q2 2025 EPS forecast is not conservative when considering the company's revenue growth, actual EPS performance, and analyst expectations. The forecast likely struck a balance between the potential challenges and the company's strategic initiatives aimed at navigating a changing pharmacy and retail landscape.