Eyes on profitability during Walgreens Q4 earnings
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Walgreens Boots Alliance (NASDAQ:WBA) is set to post fourth quarter results on Thursday before markets open, with investors keeping an eye on the pharmacy chainâs profitability amid a challenging economic environment.
Wall Street expects the company to post earnings per share (EPS) to $0.69, while revenue is expected to rise 7.3% to $34.82 billion.
Earlier in June, the company failed to meet earnings expectations for its third quarter and trimmed its outlook, as the end to COVID-19 as a health emergency in May led to a weaker demand for vaccines and testing products, while inflation-weary customers kept their spending low.
A recent Seeking Alpha article points out that the company is facing challenges and an unforeseen management transition is leading to a significant drop in share price. WBA fell nearly 39% so far this year.
The company recently named former Cigna (CI) executive Tim Wentworth as its new chief executive after the abrupt departure of WBA's former CEO, Rosalind Brewer. Its chief financial officer James Kehoe also left the company in August.
Brokerage TD Cowen believes WBA will provide conservative guidance, possibly in the $3.30-$3.50 range, as well as a possible dividend cut during the fourth quarter.
Seeking Alpha analyst Nathan Aisenstadt also believes that Walgreens "will have to reconsider its dividend policy, which has been in place for the past decades due to the sharp decline in its margins in the post-COVID-19 era, with the ultimate goal of keeping it from going bankrupt."
Over the last two years, the Deerfield, Illinois-based drug retailer has beaten EPS estimates 88% of the time and has beaten revenue estimates 100% of the time.
Analysts are conservative on the stock with Seeking Alpha and Wall Street analysts as well as Seeking Alpha Quant ratings considering it a âholdâ. 

Over the last 3 months, EPS estimates have seen no upward revisions, compared to six downward revisions, while revenue estimates have seen two upward revisions versus one downward move.


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