On Friday, Jefferies, a global investment banking firm, adjusted its price target for Walgreens Boots Alliance (NASDAQ:WBA), lowering it to $19.00 from the previous $22.50. Despite this change, the firm has decided to maintain a Hold rating on the stock.
The revision reflects Jefferies' concerns regarding Walgreens' ability to meet the current earnings per share (EPS) expectations set by the Street. The analyst from Jefferies cited improvements in Walgreens' U.S. Health segment but noted that the current weak consumer environment is hindering the company's potential for growth and earnings performance enhancement.
The report also touched on the ongoing strategic review by Walgreens, which could lead to significant cost reductions and possible asset sales. However, the analyst emphasized that any benefits from such changes are expected to take multiple years to materialize.
Walgreens, a prominent player in the retail pharmacy sector, has been navigating a challenging market. The company's efforts to improve its financial performance have been closely watched by investors and industry analysts alike.
The new price target set by Jefferies indicates a cautious outlook for Walgreens' stock in the near term, as the company continues to work through its strategic initiatives and adapt to the broader economic pressures.
InvestingPro Insights
As investors digest the revised price target from Jefferies for Walgreens Boots Alliance (NASDAQ:WBA), real-time data from InvestingPro provides additional context. With a market capitalization of $18.7 billion, Walgreens shows a negative P/E ratio of -3.00, reflecting recent challenges in earnings. The adjusted P/E ratio for the last twelve months as of Q2 2024 stands at -23.05, indicating investor concerns about profitability. However, the company's revenue has grown by 8.48% during the same period, suggesting some underlying business strengths.
InvestingPro Tips highlight the company's dividend yield, which at 4.61% remains attractive to income-focused investors, despite a significant dividend cut as shown by a -47.92% dividend growth rate. Additionally, the company's stock price is at 59.29% of its 52-week high, potentially offering a value opportunity for long-term investors. For those looking for more in-depth analysis, InvestingPro offers further tips, with an additional 24 available to help you make informed decisions. Use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and uncover the full range of insights that can guide your investment strategy.
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