Can Walgreens' earnings surprise (if happens) be enough as stock faces pressure amid litigation woes?
J. Michael Jones

Walgreens Boots Alliance (NASDAQ:WBA) is scheduled to announce Q4 earnings results on Thursday, October 13th, before market open.
The consensus EPS Estimate is $0.77 (-34.2% Y/Y) and the consensus Revenue Estimate is $32.17B (-6.1% Y/Y).
Over the last 2 years, WBA has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.
Over the last 3 months, EPS estimates have seen 1 upward revision and 7 downward. Revenue estimates have seen 2 upward revisions and 4 downward.
The drug retailer's stock fell -7.27% on June 30 despite Q3 results beating analysts estimates. Revenue declined -4.2% Y/Y to $32.6B, while non-GAAP EPS fell ~30% YoY to $0.96.

Walgreens seems to be focused on acquisitions in the past few months. A day ago (Oct. 11), WBA said it will buy the remaining 45% stake in home care services provider CareCentrix for ~$392M. The company had completed the acquisition of the 55% interest in CareCentrix on Aug. 31.
Walgreens announced in September that it was acquiring the remaining ~30% stake in Shields Health Solutions for ~$1.37B. WBA had taken its stake in Shields to ~71% last year.
There were reports in July that Teladoc could potentially be a target for a CVS Health or Walgreens, around the time Amazon agreed to buy One Medical for $3.9B.
However, the pharmacy retail chain has been embroiled in several lawsuits. Earlier in October, a panel of federal judges ordered to consolidate more than 80 cases accusing Walgreens, CVS Health and Walmart of selling generic Tylenol (acetaminophen) without warning of a potential link to autism if taken during pregnancy.
Opioid-related lawsuits also consider to linger. In August, a federal judge in Ohio ordered these three companies to pay a combined $650.6M to two counties for the damage done by the opioid crisis.
Meanwhile, a court ruling in San Francisco holding Walgreens liable for the opioid crisis in the city, created another overhang for the company shares, according to Bank of America.
YTD, WBA has shed ~38%, even more than the broad market indicator SP500, which has lost ~25% in this period. See chart here.
The SA Quant Rating on the shares is Hold, which takes into account factors such as Momentum, Profitability, and Valuation among others. WBA has an A- factor grade for Profitability and an F score for Growth. The average Wall Street Analysts' Rating agrees with a Hold rating of its own, wherein 16 out of 19 analysts see the stock as such.
On the operations front, Walgreens rolled out updated COVID-19 booster shots, mostly from Pfizer and BioNTech, in September, as government deliveries of Moderna's vaccine were limited.
Recent earnings Analysis from our contributors:Walgreens: Options Traders Expect A Big Stock Price Move Post EarningsWalgreens Earnings Preview: Headed Towards 'Value Trap' Neighborhood, But A 12% Free-Cash-Flow Yield Is Noteworthy