What to Look for in Walgreens Earnings

Walgreens Boots Alliance Inc. (NASDAQ: WBA) is scheduled to report its fiscal second-quarter financial results before the markets open on Tuesday. The consensus estimates from Thomson Reuters are $1.28 in earnings per share (EPS) on $30.66 billion in revenue. In the same period of the previous year, the drug store operator posted EPS of $1.18 and $26.57 billion in revenue.

This fiscal year started with a comparatively strong first quarter, as expected. The ongoing work to control costs across Walgreens Boots Alliance and improve adjusted operating income margins has grown earnings overall. Although it is early in the year, the company is on track to deliver against its expectations.

The acquisition of Rite Aid is still on the table, and we can definitely expect an update on the merger in this coming earnings report. As the deal stands now, Walgreens will acquire Rite Aid for $9 per share in cash, valuing the total deal at roughly $17.2 billion.
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A few analysts weighed in on Walgreens ahead of its earnings report:

• Deutsche Bank reiterated a Buy rating.
• Morgan Stanley reiterated a Buy rating and a $95 price target.
• Credit Suisse has an Outperform rating with a $92 price target.

So far, Walgreens has stayed more or less in line with the broad markets, with the stock up about 2% year to date. Over the past 52 weeks, the stock is up nearly 5%.

Shares of Walgreens were trading at $85.45 on Monday, with a consensus analyst price target of $94.14 and a 52-week trading range of $71.50 to $97.30.