WBA - Embedded Expectations Analysis - 2018 02 08
─ Walgreens Boots Alliance, Inc. (WBA:USA) currently trades around corporate averages relative to UAFRS-based (Uniform) Earnings, with a 20.0x Uniform P/E, implying somewhat bullish expectations for the firm. However, management has concerns about strategic partnerships, European markets, and growth─ Specifically, management may be concerned about their reduced stake in their main wholesale partner in China, and may be exaggerating the benefits they are seeing from the upgrade of the existing Walgreens business model in pharmacy and in retail. Furthermore, they may be concerned about their strategic partnership with FedEx, and may also be concerned about operations in European markets due to Brexit and governments pushing down margins for pharmacies. Moreover, they may lack confidence in the sustainability of sales growth, as well as expectations for slower declines in comparable retail sales. Finally, they may be exaggerating how well their beauty offering has been received, and may also be exaggerating their satisfaction regarding their clinic partnerships
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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