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Walgreens (WBA) to Report Q4 Earnings: What's in the Cards?
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Walgreens Boots Alliance, Inc. (WBA - Free Report) is slated to release fourth-quarter fiscal 2023 results on Oct 12, before market open.
In the fiscal third quarter, the company missed earnings estimates by 5.7%. WBA’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 0.81%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Walgreens is likely to have gained from successful executions of growth strategies on the United States and the international fronts. The firm returned an incremental 300 stores to regular pharmacy operating hours during the fiscal third quarter through its focused investments. The company is witnessing improved market share trends with a 6% growth in stores within normal hours. The company opened its ninth automated micro fulfillment center, supporting about 3,900 total stores. This is likely to have benefited the company’s top line in the fiscal fourth quarter.
In August 2023, Walgreens Boots Alliance and VillageMD opened the first Village Medical at Walgreens primary care practice in Chicago. Village MD’s physicians and Walgreens’ pharmacy team members collaborate to provide patients with cost-effective, expert care for chronic conditions, general illnesses and injuries. These strategic pacts are likely to have positively contributed to the company’s fiscal third-quarter performance, thus adding to the top line.
However, the decline in COVID testing volumes, rapid softening of the macro environment, higher inflation and interest rates, lower tax refunds and an uncertain economic outlook are likely to have impeded Walgreen's revenues in the fiscal fourth quarter.
United States
Walgreens is likely to have registered growth in the U.S. retail pharmacy business as script volume is likely to have gained traction through the months of the fiscal fourth quarter.
In August 2023, Walgreens announced the offering of in-store vouchers and off-site vaccination clinics through its employer vaccination program and is rolling out a low-cost, 2 results in 1 test for flu and COVID-19 this fall respiratory virus season. The same month, Walgreens launched Over-the-counter (OTC) NARCAN Nasal Spray, which will be available at Walgreens stores and online, with nationwide availability. We believe this launch to have contributed strongly to the top line.
In the United States, Walgreens’ retail business witnessed impressive momentum through digital and omnichannel growth from the myWalgreens loyalty program, owned brand innovation and other profit streams. During the fiscal third quarter, the company’s retail gross margin performance remained strong, reflecting effective margin management, including strategic pricing, promotional optimization and improved shrink. The company is progressing on building its next growth engine in healthcare, rapidly establishing the portfolio of assets across the care continuum. These developments are likely to have contributed to Walgreens’ fiscal fourth-quarter revenues.
Our estimate suggests Walgreens’ U.S. Healthcare business to register an increase of 176.1% in Q4.
International
In recent times, the international business of WBA is registering 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 fourth quarter again, banking on continued positive trends globally.
Walgreens Boots Alliance, Inc. Price and EPS Surprise
During the fiscal third quarter, Horizon Blue Cross Blue Shield signed on as the fourth payor partner for Walgreens Health. Shields and CareCentrix recently contracted with a leading national health solution and care delivery organization. Shields also added six new health system partners this year. Walgreens Boots partnered with TelePharm to expand tele-pharmacy services, improve access to care and provide flexibility for how and when patients engage with pharmacists. This development is expected to have boosted the company’s revenues in the quarter to be reported.
Per our estimates, the Walgreens International business will likely register an increase of 9.5% in the fiscal fourth quarter.
Estimates
For fourth-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $34.55 billion. The projection indicates a 6.5% rise from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at 69 cents, suggesting a 13.8% fall 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 -2.60%. 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 #4 (Sell).
AN2 Therapeutics has a 2024 expected earnings growth rate of 5.94%. ANTX’s current ratio of 8.8% compares favorably with the industry’s 4.89%.
Biohaven Ltd. (BHVN - Free Report) has an Earnings ESP of +4.69% and a Zacks Rank of #2. The company is expected to release fiscal fourth-quarter 2023 results on Nov 8.
Biohaven has a 2024 expected earnings growth rate of 5.94%. BHNV’s current ratio of 8.8% compares favorably with the industry’s 4.89%.
Nurix Therapeutics Inc. (NRIX - Free Report) currently has an Earnings ESP of +141.86% and a Zacks Rank of #2. AKRO is expected to release third-quarter 2023 results on Oct 5.
Nurix Therapeutics earnings yield of (32.44%) compares favorably with the industry’s (40.05%).
Image: Bigstock
Walgreens (WBA) to Report Q4 Earnings: What's in the Cards?
Walgreens Boots Alliance, Inc. (WBA - Free Report) is slated to release fourth-quarter fiscal 2023 results on Oct 12, before market open.
In the fiscal third quarter, the company missed earnings estimates by 5.7%. WBA’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 0.81%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Walgreens is likely to have gained from successful executions of growth strategies on the United States and the international fronts. The firm returned an incremental 300 stores to regular pharmacy operating hours during the fiscal third quarter through its focused investments. The company is witnessing improved market share trends with a 6% growth in stores within normal hours. The company opened its ninth automated micro fulfillment center, supporting about 3,900 total stores. This is likely to have benefited the company’s top line in the fiscal fourth quarter.
In August 2023, Walgreens Boots Alliance and VillageMD opened the first Village Medical at Walgreens primary care practice in Chicago. Village MD’s physicians and Walgreens’ pharmacy team members collaborate to provide patients with cost-effective, expert care for chronic conditions, general illnesses and injuries. These strategic pacts are likely to have positively contributed to the company’s fiscal third-quarter performance, thus adding to the top line.
However, the decline in COVID testing volumes, rapid softening of the macro environment, higher inflation and interest rates, lower tax refunds and an uncertain economic outlook are likely to have impeded Walgreen's revenues in the fiscal fourth quarter.
United States
Walgreens is likely to have registered growth in the U.S. retail pharmacy business as script volume is likely to have gained traction through the months of the fiscal fourth quarter.
In August 2023, Walgreens announced the offering of in-store vouchers and off-site vaccination clinics through its employer vaccination program and is rolling out a low-cost, 2 results in 1 test for flu and COVID-19 this fall respiratory virus season. The same month, Walgreens launched Over-the-counter (OTC) NARCAN Nasal Spray, which will be available at Walgreens stores and online, with nationwide availability. We believe this launch to have contributed strongly to the top line.
In the United States, Walgreens’ retail business witnessed impressive momentum through digital and omnichannel growth from the myWalgreens loyalty program, owned brand innovation and other profit streams. During the fiscal third quarter, the company’s retail gross margin performance remained strong, reflecting effective margin management, including strategic pricing, promotional optimization and improved shrink. The company is progressing on building its next growth engine in healthcare, rapidly establishing the portfolio of assets across the care continuum. These developments are likely to have contributed to Walgreens’ fiscal fourth-quarter revenues.
Our estimate suggests Walgreens’ U.S. Healthcare business to register an increase of 176.1% in Q4.
International
In recent times, the international business of WBA is registering 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 fourth quarter again, banking on continued positive trends globally.
Walgreens Boots Alliance, Inc. Price and EPS Surprise
Walgreens Boots Alliance, Inc. price-eps-surprise | Walgreens Boots Alliance, Inc. Quote
During the fiscal third quarter, Horizon Blue Cross Blue Shield signed on as the fourth payor partner for Walgreens Health. Shields and CareCentrix recently contracted with a leading national health solution and care delivery organization. Shields also added six new health system partners this year. Walgreens Boots partnered with TelePharm to expand tele-pharmacy services, improve access to care and provide flexibility for how and when patients engage with pharmacists. This development is expected to have boosted the company’s revenues in the quarter to be reported.
Per our estimates, the Walgreens International business will likely register an increase of 9.5% in the fiscal fourth quarter.
Estimates
For fourth-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $34.55 billion. The projection indicates a 6.5% rise from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at 69 cents, suggesting a 13.8% fall 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 -2.60%. 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 #4 (Sell).
Stocks to Consider
AN2 Therapeutics Inc. (ANTX - Free Report) has an Earnings ESP of +6.43% and a Zacks Rank of #2. The company is expected to release third-quarter 2023 results on Nov 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
AN2 Therapeutics has a 2024 expected earnings growth rate of 5.94%. ANTX’s current ratio of 8.8% compares favorably with the industry’s 4.89%.
Biohaven Ltd. (BHVN - Free Report) has an Earnings ESP of +4.69% and a Zacks Rank of #2. The company is expected to release fiscal fourth-quarter 2023 results on Nov 8.
Biohaven has a 2024 expected earnings growth rate of 5.94%. BHNV’s current ratio of 8.8% compares favorably with the industry’s 4.89%.
Nurix Therapeutics Inc. (NRIX - Free Report) currently has an Earnings ESP of +141.86% and a Zacks Rank of #2. AKRO is expected to release third-quarter 2023 results on Oct 5.
Nurix Therapeutics earnings yield of (32.44%) compares favorably with the industry’s (40.05%).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.