WBA - Embedded Expectations Analysis - 2020 06 12
Walgreens Boots Alliance, Inc. (WBA:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 16.0x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about their cash flow, sales growth, and marginsSpecifically, management may be concerned about the progress towards a return to normal operations and script trend stability, and the sustainability of pharmacy
pick-up sales growth. In addition, they may lack confidence in their ability to sustain their Pharmaceutical Wholesale performance, Boots UK pharmacy comp sales growth, and free cash flow strength. They may also be concerned about initial sales trends in the UK, the sustainability of Health and Wellness and Food Grocery category performance, and the progress of mass personalization initiatives in the US. Furthermore, they may have concerns about declines in beauty and seasonal category sales, their optician and hearing care business closure in the UK, and the impact of category shifts on margins
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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