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Walgreens Boots Alliance Inc WBA

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Walgreens Boosts 2021 Outlook on Strong Second-Quarter Results; Shares Fairly Valued

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Narrow-moat Walgreens turned in strong fiscal second-quarter results, and the firm increased its earnings outlook for 2021 to mid- to high-single-digit growth from the low single digits. We were already expecting growth in the midsingle digits, so we do not expect to change our fair value estimate at first glance. However, we appreciate the more positive trends at Walgreens in recent quarters, and it appears that new CEO Rosalind Brewer has the wind at her back, as she takes the reins at this top-tier retail pharmacy.

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Company Profile

Business Description

Walgreens Boots Alliance operates over 21,000 locations in 50 states and 11 countries. The core defensive positioning is primarily around the pharmacy that are placed in high traffic locations. Currently, the company has the largest retail pharmacy market share (around 20%, excluding mail) which provides significant cost advantages and scale. Walgreens has established strategic partnerships to offer incremental services to increase average revenue per customer and has an equity stakes in AmerisourceBergen (26%) and Sinopharm Holding Guoda Drugstores (40%).

108 Wilmot Road
Deerfield, IL, 60015
T +1 847 315-3700
Sector Healthcare
Industry Pharmaceutical Retailers
Most Recent Earnings Feb 28, 2021
Fiscal Year End Aug 31, 2021
Stock Type Distressed
Employees 331,000