Walgreens Boots Alliance: Can the Retail Pharmacy Giant Turn Things Around in 2025?

Walgreens Boots Alliance (WBA) stock took a nosedive in 2024, plummeting by a staggering 64%. The retail pharmacy giant faced a perfect storm of challenges, including persistent low drug reimbursement rates, consumer avoidance of high-priced grocery items, and a costly turnaround plan. As the company looks to 2025, investors are left wondering: can Walgreens Boots Alliance turn things around and regain its footing in the market?



The company's strategic review and turnaround plan have addressed the issues by focusing on improving its core business: retail pharmacy. Walgreens Boots Alliance has taken several steps to stabilize its retail pharmacy business, control operating costs, improve cash flow, and address reimbursement models. These actions include:

1. Finalizing a significant multiyear footprint optimization program: The company is closing certain underperforming U.S. stores to improve profitability and cash flow.
2. Launching a U.S. Retail Pharmacy action plan: This plan aims to invest in and deliver an improved customer and patient experience across channels, enhancing the company's competitive position.
3. Aligning U.S. Pharmacy and Healthcare organizations: This move aims to enhance go-to-market capabilities and simplify the U.S. Healthcare portfolio, making it more focused and efficient.
4. Addressing reimbursement models: The company is working to address reimbursement pressures and improve pharmacy margins, which have been negatively impacted by recent marketplace dynamics.



However, the road to recovery won't be easy. Walgreens Boots Alliance faces an uphill battle in a challenging retail environment and a consumer base that is increasingly price-sensitive. The company's turnaround will take time, and investors should be prepared for a bumpy ride.

One positive sign for investors is the company's ability to maintain its fiscal 2025 adjusted EPS guidance of $1.40 to $1.80. This suggests that Walgreens Boots Alliance is confident in its ability to execute on its turnaround plan and deliver on its financial targets.



In conclusion, Walgreens Boots Alliance has a long road ahead to turn things around and regain investor confidence. The company's strategic review and turnaround plan have addressed the key issues facing the business, but the road to recovery will be challenging and uncertain. Investors should closely monitor the company's progress and be prepared for a bumpy ride. As the saying goes, "Rome wasn't built in a day," and neither will Walgreens Boots Alliance's turnaround.