WBA - Embedded Expectations Analysis - 2019 08 27
Walgreens Boots Alliance, Inc. (WBA:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 15.9x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management is concerned about meeting their EPS guidance, the sustainability of recent growth rates, and the benefit they will see from partnerships.Specifically, management may be exaggerating the impact they expect to see from their upcoming partnerships, and they appear concerned about their ability to meet their full year EPS guidance. Furthermore, they appear concerned about the ongoing impact of AmerisourceBergen's impairment of PharMEDium, and they appear concerned about the sustainability of recent growth rates in central specialty. Additionally, management may lack confidence in their ability to continue improving gross margins, and they may be concerned about ongoing NHS underfunding and higher generic pricing. Moreover, management appears concerned about the margin impact of their branded and generic sales mix, and they may lack confidence in their ability to improve their inventory efficiency.
Walgreens Boots Alliance is a holding company. Through its subsidiaries, the company is engaged in retail and wholesale pharmacy. The company's operations are organized into three divisions, which are also its reportable segments: Retail Pharmacy USA; Retail Pharmacy International; and Pharmaceutical Wholesale. The Retail Pharmacy USA division has pharmacy-led health and beauty retail offerings. The Retail Pharmacy International division has pharmacy-led health and beauty retail businesses. The Pharmaceutical Wholesale division, which mainly operates under the Alliance Healthcare brand, supplies medicines, other healthcare products and related services to pharmacies, doctors, health centers and hospitals.
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