Financial Trading Blog
Stock of the day 08/04/2015 – Walgreens Boots Alliance Inc
Walgreens Boots Alliance will be one of the first bellwethers for this trend as it announces its Q2 2015 earnings release on Thursday.
Walgreens and Alliance Boots merged on 31st December 2014 after the former bought the remaining 55% it didn’t own of the latter, solidifying Walgreens’ position as the No. 1 pharmacy chain in the US. This earnings release will be the first as a joint company, and if the market reaction is anything to go by it could be a good one. After starting 2014 at $57.20, WBA closed the year at $76.08 as the merger was announced. This strong form only increased in 2015, and after hitting a low of $75 at the end of January the stock has begun to hit near all-time highs, reaching $88 on Monday. The stock slipped, only slightly, on Tuesday, and is now trading at $87.30.
(Source: IT-Finance.com 08/04/2015)
On Thursday Walgreens Boots Alliance is expected to announce earnings per share of $0.94 compared to $0.91 at this point last year, alongside an increase to $27.7 billion in revenue compared to $19.6 billion year on year. With Walgreens, as Walgreens alone, beating its last quarterly estimates by 8%, investors will be keen to see whether the merger has slowed down the fairly rapid growth the pharmaceutical chain was making. On top of this WBA have confirmed it will provide its full year guidance, in the process (hopefully) establishing a clearer picture of how much money this newly formed company is actually making. It will also be interesting to see if a stronger dollar, and the increasing importance of the pound’s role in the company, will affect the Walgreens Boots Alliance’s projections going forwards.
Perhaps because of the uncertainty around the dollar, analysts remain tentative around the stock, giving it a consensus rating of ‘hold’ with an average target price of $77.39.
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