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Here's Why You Should Invest in Walgreens Boots Stock Now
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Walgreens Boots Alliance, Inc. (WBA - Free Report) has been gaining investors’ confidence on consistently upbeat results. We are also encouraged by Walgreens Boots’ entry into the world’s most coveted index — DJIA.
Over the past three months, the company’s share price has outperformed its industry. The stock has gained 8.5%, compared with the industry’s 7.6% and the S&P 500’s 7.3%.
This world’s first pharmacy-led, health and wellbeing enterprise has a market cap of $72.45 billion. The company’s projected earnings growth rate for the current year is also favorable at 17.1% in contrast to the industry’s 2.6% decline.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
The company’s earnings estimate revision trend for the current year has been positive. The earnings estimates have increased 0.34% to $5.97 per share over the past 60 days. Further, the Zacks Consensus Estimate for current-year revenues of $131.67 billion reflects an improvement of 11.4% year over year.
Per our Zacks Style Score system, Walgreens Boots has a Growth Score of B, which reflects the company’s solid prospects. Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Let’s find out whether the recent positive trend is a sustainable one.
Express Script Deal Looks Promising
In a bid to ensure availability of specialty brand drugs, Walgreens Boots has tied up with Express Scripts and plans to expand their existing group purchasing efforts. Since biosimilars have the potential to lower production costs, the move is considered a prudent and timely one.
Rite Aid Store Purchase — A Major Plus
At 2017-end, Walgreens Boots purchased 1,932 stores, three distribution centers and related inventory from Rite Aid for a total transaction value of $4.375 billion.
The deal seems strategic for Walgreens Boots from a number of aspects. It allowed Rite Aid to buy generic drugs sourced through a Walgreens Boots’ affiliate at a cost equivalent to Walgreens Boots’ for about 10 years which buoys optimism. Also, Rite Aid is supposed to provide Walgreens Boots with certain transition services for up to three years post the deal closure.
Per Walgreens Boots, this transaction will extend its growth trajectory and offer operational plus financial benefits. It will also help the company expand and optimize retail pharmacy network in key U.S. markets, including the Northeast.
Solid Cash Position
Walgreens Boots exited the third quarter of fiscal 2018 with cash and cash equivalents of $1.82 billion, compared with $1.75 billion at the end of the second quarter. The healthy cash balance should support the company’s plans for suitable acquisitions to drive revenues.
Also, bolstered by a strong cash position, the company strives to reward its shareholders through dividend payments and share repurchases. In this regard, the company has announced a new $10-billion share repurchase program.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2 (Buy).
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Here's Why You Should Invest in Walgreens Boots Stock Now
Walgreens Boots Alliance, Inc. (WBA - Free Report) has been gaining investors’ confidence on consistently upbeat results. We are also encouraged by Walgreens Boots’ entry into the world’s most coveted index — DJIA.
Over the past three months, the company’s share price has outperformed its industry. The stock has gained 8.5%, compared with the industry’s 7.6% and the S&P 500’s 7.3%.
This world’s first pharmacy-led, health and wellbeing enterprise has a market cap of $72.45 billion. The company’s projected earnings growth rate for the current year is also favorable at 17.1% in contrast to the industry’s 2.6% decline.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
The company’s earnings estimate revision trend for the current year has been positive. The earnings estimates have increased 0.34% to $5.97 per share over the past 60 days. Further, the Zacks Consensus Estimate for current-year revenues of $131.67 billion reflects an improvement of 11.4% year over year.
Per our Zacks Style Score system, Walgreens Boots has a Growth Score of B, which reflects the company’s solid prospects. Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Let’s find out whether the recent positive trend is a sustainable one.
Express Script Deal Looks Promising
In a bid to ensure availability of specialty brand drugs, Walgreens Boots has tied up with Express Scripts and plans to expand their existing group purchasing efforts. Since biosimilars have the potential to lower production costs, the move is considered a prudent and timely one.
Rite Aid Store Purchase — A Major Plus
At 2017-end, Walgreens Boots purchased 1,932 stores, three distribution centers and related inventory from Rite Aid for a total transaction value of $4.375 billion.
The deal seems strategic for Walgreens Boots from a number of aspects. It allowed Rite Aid to buy generic drugs sourced through a Walgreens Boots’ affiliate at a cost equivalent to Walgreens Boots’ for about 10 years which buoys optimism. Also, Rite Aid is supposed to provide Walgreens Boots with certain transition services for up to three years post the deal closure.
Per Walgreens Boots, this transaction will extend its growth trajectory and offer operational plus financial benefits. It will also help the company expand and optimize retail pharmacy network in key U.S. markets, including the Northeast.
Solid Cash Position
Walgreens Boots exited the third quarter of fiscal 2018 with cash and cash equivalents of $1.82 billion, compared with $1.75 billion at the end of the second quarter. The healthy cash balance should support the company’s plans for suitable acquisitions to drive revenues.
Also, bolstered by a strong cash position, the company strives to reward its shareholders through dividend payments and share repurchases. In this regard, the company has announced a new $10-billion share repurchase program.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2 (Buy).
Amedisys’ long-term expected earnings growth rate is 19.4%. The stock holds a Zacks Rank #1 at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>