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Walgreens (WBA) to Report Q3 Earnings: What's in the Cards?
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Walgreens Boots Alliance, Inc. (WBA - Free Report) is slated to release third-quarter fiscal 2023 results on Jun 27 before market open.
In the fiscal second quarter, the company delivered an earnings surprise of 5.5%. WBA’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.48%.
Let’s look at how things have shaped up prior to this announcement.
Factors at Play
Walgreens is likely to have gained from continued strategic executions on the United States and the international fronts. Through its focused investments, the firm returned an incremental 500 stores to normal pharmacy operating hours during the fiscal second quarter. The company is witnessing improved market share trends with a 6% growth in stores within normal hours. The company opened its ninth automated micro fulfilment center, supporting about 3,000 total stores. This is likely to have benefited company’s top line in the fiscal third quarter.
The addition of Summit Health is transformational as it creates one of the largest integrated provider platforms in the United States, delivering quality affordable care for all patient populations regardless of insurance or payer type. Summit will accelerate the U.S. Healthcare segment to scale and profit. We believe this to have contributed positively to the company’s fiscal third-quarter revenues.
In April 2023, Walgreens entered into a partnership with the Dublin-based biotech company, Prothena Corporation. The collaboration aims to accelerate patient identification. The same month, the U.S. Healthcare segment of Walgreens and VillageMD announced the expansion of Village Medical at Walgreens into Colorado, with three new primary care practices, two in Fort Collins and a third in Longmont. Village MD’s physicians and Walgreens’ pharmacy team members work together to provide patients with cost-effective, expert care for chronic conditions, general illnesses and injuries. We believe these strategic pacts to have made a positive contribution to the company’s fiscal third-quarter performance, thus adding to the top line.
United States
Walgreens is likely to have registered growth in U.S. retail pharmacy business as the COVID headwind lessens and initiatives to drive script volume gain traction through the months of the fiscal third quarter. During the fiscal second quarter, the company’s flu vaccinations were up from the prior year’s levels due to higher flu incidences. We believe this trend to continue through the fiscal third quarter, contributing to the top line.
Walgreens Boots Alliance, Inc. Price and EPS Surprise
In the United States, Walgreens’ retail business continued to witness impressive momentum through digital and omnichannel growth from the myWalgreens loyalty program, owned brand innovation and other profit streams. During the fiscal second quarter, the company’s retail gross margin performance remained strong, reflecting effective margin management including strategic pricing and promotional optimization and improved shrink. These developments are likely to have contributed to Walgreens’ fiscal third-quarter revenues.
International
In the last reported quarter, the international business registered an ongoing rebound and strong execution across its retail portfolio, particularly in Boots U.K. and growth in the German wholesale business. The company is expected to have registered strong growth in the fiscal third quarter, banking on continued positive trends.
During the fiscal second quarter, the company added its fourth payer partner for the organic business, Horizon Blue Cross Blue Shield of New Jersey and signed five clinical trial contracts. Shields Health Solutions and CareCentrix continue to perform well, which led to the accelerated acquisition of both entities. On a combined basis, the company’s best-in-class assets drove pro forma sales growth of 30% in the quarter. This development is expected to have boosted the company’s revenues in the quarter to be reported.
Estimates
For third-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $33.88 billion. The projection indicates a 3.9% rise from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at $1.07, suggesting an 11.5% growth year on year.
What Our Model Suggests
Our proven model predicts an earnings beat for Walgreens this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Walgreens has an Earnings ESP of -1.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3 (Hold).
HealthEquity has a 2024 expected earnings growth rate of 35.3%. HQY’s earnings yield of 3.07% compares favorably with the industry’s (3.96%).
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +1.96% and a Zacks Rank of #2. Exact Sciences is expected to release second-quarter fiscal 2023 results on Aug 1.
Exact Sciences’ Price/Sales ratio of 7.6% compares favorably with the industry’s 7.5%. EXAS has a debt/equity ratio of 0.77 compared with the industry’s 0.00.
Akero Therapeutics Inc. (AKRO - Free Report) currently has an Earnings ESP of +0.40% and a Zacks Rank of #2. AKRO is expected to release second-quarter 2023 results on Aug 3.
AKRO’s arnings yield of (5.51%) compares favorably with the industry’s (32.5%). AKRO’s current ratio of 20.8% compares favorably with the industry’s 5%.
Image: Bigstock
Walgreens (WBA) to Report Q3 Earnings: What's in the Cards?
Walgreens Boots Alliance, Inc. (WBA - Free Report) is slated to release third-quarter fiscal 2023 results on Jun 27 before market open.
In the fiscal second quarter, the company delivered an earnings surprise of 5.5%. WBA’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.48%.
Let’s look at how things have shaped up prior to this announcement.
Factors at Play
Walgreens is likely to have gained from continued strategic executions on the United States and the international fronts. Through its focused investments, the firm returned an incremental 500 stores to normal pharmacy operating hours during the fiscal second quarter. The company is witnessing improved market share trends with a 6% growth in stores within normal hours. The company opened its ninth automated micro fulfilment center, supporting about 3,000 total stores. This is likely to have benefited company’s top line in the fiscal third quarter.
The addition of Summit Health is transformational as it creates one of the largest integrated provider platforms in the United States, delivering quality affordable care for all patient populations regardless of insurance or payer type. Summit will accelerate the U.S. Healthcare segment to scale and profit. We believe this to have contributed positively to the company’s fiscal third-quarter revenues.
In April 2023, Walgreens entered into a partnership with the Dublin-based biotech company, Prothena Corporation. The collaboration aims to accelerate patient identification. The same month, the U.S. Healthcare segment of Walgreens and VillageMD announced the expansion of Village Medical at Walgreens into Colorado, with three new primary care practices, two in Fort Collins and a third in Longmont. Village MD’s physicians and Walgreens’ pharmacy team members work together to provide patients with cost-effective, expert care for chronic conditions, general illnesses and injuries. We believe these strategic pacts to have made a positive contribution to the company’s fiscal third-quarter performance, thus adding to the top line.
United States
Walgreens is likely to have registered growth in U.S. retail pharmacy business as the COVID headwind lessens and initiatives to drive script volume gain traction through the months of the fiscal third quarter. During the fiscal second quarter, the company’s flu vaccinations were up from the prior year’s levels due to higher flu incidences. We believe this trend to continue through the fiscal third quarter, contributing to the top line.
Walgreens Boots Alliance, Inc. Price and EPS Surprise
Walgreens Boots Alliance, Inc. price-eps-surprise | Walgreens Boots Alliance, Inc. Quote
In the United States, Walgreens’ retail business continued to witness impressive momentum through digital and omnichannel growth from the myWalgreens loyalty program, owned brand innovation and other profit streams. During the fiscal second quarter, the company’s retail gross margin performance remained strong, reflecting effective margin management including strategic pricing and promotional optimization and improved shrink. These developments are likely to have contributed to Walgreens’ fiscal third-quarter revenues.
International
In the last reported quarter, the international business registered an ongoing rebound and strong execution across its retail portfolio, particularly in Boots U.K. and growth in the German wholesale business. The company is expected to have registered strong growth in the fiscal third quarter, banking on continued positive trends.
During the fiscal second quarter, the company added its fourth payer partner for the organic business, Horizon Blue Cross Blue Shield of New Jersey and signed five clinical trial contracts. Shields Health Solutions and CareCentrix continue to perform well, which led to the accelerated acquisition of both entities. On a combined basis, the company’s best-in-class assets drove pro forma sales growth of 30% in the quarter. This development is expected to have boosted the company’s revenues in the quarter to be reported.
Estimates
For third-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $33.88 billion. The projection indicates a 3.9% rise from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at $1.07, suggesting an 11.5% growth year on year.
What Our Model Suggests
Our proven model predicts an earnings beat for Walgreens this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Walgreens has an Earnings ESP of -1.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3 (Hold).
Stocks Worth a Look
HealthEquity, Inc. (HQY - Free Report) has an Earnings ESP of +4.93% and a Zacks Rank of #1. The company will release second-quarter 2023 results on Sep 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
HealthEquity has a 2024 expected earnings growth rate of 35.3%. HQY’s earnings yield of 3.07% compares favorably with the industry’s (3.96%).
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +1.96% and a Zacks Rank of #2. Exact Sciences is expected to release second-quarter fiscal 2023 results on Aug 1.
Exact Sciences’ Price/Sales ratio of 7.6% compares favorably with the industry’s 7.5%. EXAS has a debt/equity ratio of 0.77 compared with the industry’s 0.00.
Akero Therapeutics Inc. (AKRO - Free Report) currently has an Earnings ESP of +0.40% and a Zacks Rank of #2. AKRO is expected to release second-quarter 2023 results on Aug 3.
AKRO’s arnings yield of (5.51%) compares favorably with the industry’s (32.5%). AKRO’s current ratio of 20.8% compares favorably with the industry’s 5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.