Walgreens Stock Surges as Cost-Cutting Measures Boost StockWalgreens Boots Alliance (NASDAQ: NASDAQ:WBA ) saw its stock surge by more than 13% after announcing a major cost-cutting initiative, including the closure of 1,200 underperforming stores by 2027. The company’s fiscal fourth-quarter earnings exceeded Wall Street's expectations, which, along with these aggressive restructuring measures, contributed to investor optimism and the stock's sharp rise. This marks a significant turnaround for a company that has faced ongoing challenges in recent years, from declining pharmacy reimbursement rates to softer consumer spending and a bumpy transition into primary care.
Earnings Overview
Walgreens' fiscal fourth-quarter performance showed resilience amid a challenging environment. The company reported revenue of $37.55 billion, surpassing the analyst expectation of $35.76 billion, representing a 6% year-over-year increase. Adjusted earnings per share came in at 39 cents, exceeding the projected 36 cents. However, the company did report a net loss of $3 billion due to a valuation allowance, largely related to opioid settlement charges, which contrasts sharply with a loss of $180 million in the same period last year.
The retail giant is navigating a "rocky fiscal 2024" with pressures from falling reimbursement rates and higher operational costs. To address these challenges, Walgreens has undertaken extensive cost-cutting efforts, including store closures, workforce reductions, and the integration of artificial intelligence to optimize its supply chain. The company successfully cut $1 billion in costs during the fiscal year, a substantial achievement that bolstered its U.S. retail pharmacy segment, according to CFO Manmohan Mahajan. These efforts helped Walgreens maintain steady growth across its key business segments, including a notable 7.1% year-over-year rise in U.S. healthcare revenue to $2.11 billion, partly driven by growth in its specialty pharmacy and primary care businesses.
The decision to close 1,200 underperforming stores will further support the company’s financial health. Walgreens CEO Tim Wentworth noted that the closures will result in a healthier store base and will improve free cash flow while helping the company adapt to shifting consumer behavior. With 8,700 U.S. locations, 25% of which are unprofitable, the move to streamline operations is expected to be "immediately accretive" to adjusted earnings.
Additionally, Walgreens (NASDAQ: NASDAQ:WBA ) reported growth in its international unit, which posted sales of $5.97 billion, a 3.2% year-over-year increase, beating analyst expectations of $5.81 billion. The company’s U.K.-based drugstore chain, Boots, played a key role in this growth, with sales increasing by 2.3%. Walgreens’ U.S. retail pharmacy sales also rose by 6.5% to $29.47 billion, a reflection of higher prescription drug prices and continued demand despite falling margins from reimbursement rate pressures.
Technical Analysis
From a technical standpoint, Walgreens’ stock is showing strong signs of recovery after a prolonged bearish trend. The stock is up 9.22% at the time of writing, and the relative strength index (RSI) has climbed to 62.48, indicating healthy momentum without yet crossing into overbought territory. For nearly a year, Walgreens (NASDAQ: NASDAQ:WBA ) has been trading in a wedge pattern, characterized by lower highs and lower lows, reflecting its struggles in the market. However, recent news and the surge in stock price have propelled NASDAQ:WBA to break above the upper trendline of this wedge, signaling a potential reversal.
The regression analysis further supports this bullish outlook, showing that Walgreens (NASDAQ: NASDAQ:WBA ) is breaking out of its prolonged downtrend. The breakout is accompanied by a notable increase in trading volume, suggesting that the market has responded positively to the news of store closures and better-than-expected earnings. The next key level to watch is the stock's previous resistance zone, which, if breached, could lead to a more sustained upward movement.
Outlook
Walgreens (NASDAQ: NASDAQ:WBA ) is clearly undergoing a transformative period, with significant restructuring efforts aimed at streamlining operations and boosting profitability. Despite facing ongoing pressures from a challenging retail environment and falling pharmacy margins, the company’s aggressive cost-cutting, particularly the closure of 1,200 stores, is expected to be a major driver of future earnings growth. Its revenue growth, especially in the U.S. healthcare and international segments, provides further optimism for investors.
While the company faces considerable challenges in the years ahead, its commitment to refocusing on profitability, combined with strategic initiatives like AI-driven supply chain optimizations and improved pharmacy benefit manager (PBM) negotiations, indicate that Walgreens is positioning itself for a stronger future. The stock's technical breakout from its long-term bearish pattern offers a compelling opportunity for investors looking for a turnaround play in the retail pharmacy sector.
If Walgreens (NASDAQ: NASDAQ:WBA ) can continue this upward momentum and effectively navigate its cost-cutting initiatives, NASDAQ:WBA could see more sustained gains in the months ahead. Investors should keep an eye on upcoming earnings reports and management's progress on its store closure plan to gauge the long-term viability of this recovery.
Walgreens
WBA Sing Trade UnderwayWBA seems to have completed the breakout of the Inverse HS bottoming and trend reversal pattern I discussed last week.
If entry point was at close yesterday, gains are 6+%
Take profits as you feel comfortable.
Ultimate target upon completion of pattern yields a price target of approx. 10.50.
If trend reversal is a long term chance of character move, reaching the 200DMA for a gain of 50-85% is not out of the question.
Taking half positions off the table is not a bad idea.
Please watch for details
Swing Trade Opportunity - LONG WBAWBA has broken a long term downtrend line, creating a potential inverse HS in the process.
This company is due for a bounce at the very least.
Best case for longs is a longer term bottom and reversal being put in that can take us to the 200DMA or above.
See video for details
Walgreens Boots Alliance (WBA) is gearing up for a potent ...Walgreens Boots Alliance (WBA) is gearing up for a potential breakout, presenting an enticing opportunity for investors.
Recent news indicates that Walgreens is restructuring its business model and focusing on cost-cutting measures, which could significantly enhance profitability. Additionally, the company's efforts to expand its healthcare services and improve in-store experiences align well with market trends, making it well-positioned for growth. As analysts project a possible 15% surge in the stock price, now may be the time to consider WBA as a solid investment.
BOOOOOOOOOOOM...
WOW Walgreens! Why you DON'T Baghold!NASDAQ:WBA is a techable moment and I had to make a video today. I checked my watchlist of current and recent trades exited and saw that Walgreens was down -25% overnight! Horrible earnings is the "reason" but really the stock has been in an unabated downtrend for months.
I tried to take a long off the 2009 low back in January but my rules had me GET OUT in April. I did not like taking a loss at the time (no one does) but it's moments like this in trading and investing that remind you in a good way (rather than painful way) why you follow your exit rules!
WBA Walgreens Boots Alliance Options Ahead of EarningsIf you haven`t bought the dip on WBA:
Then analyzing the options chain and the chart patterns of WBA Walgreens Boots Alliance prior to the earnings report this week,
I would consider purchasing the 21usd strike price Calls with
an expiration date of 2024-4-19,
for a premium of approximately $1.00.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Box Store Giants: Macro Fib SchematicsWalmart, Costco, Target, CVS, Home Depot, and Walgreens are the largest box store giants in the market. Proctor and Gamble along with Nike are in here because they are both also mega corporations and since P&G has so many products in these stores. Nike is also a staple in these stores but Proctor and Gamble especially belongs here.
These Fibonacci Schematics are extremely clean and probably the best looking structure I have ever seen. This is an excellent example of market mechanics working through Fib Schematics.
If we were to talk about what we see here 2/27/24 then we see....
- Walmart at a couple resistances.
- P&G launching off massive Fib Cluster support.
- Costco testing the waters above and getting ready to jump into next levels.
- Home Depot testing its midpoint from its high with a massive front run from the Thick Orange Fib Line after the actual rejection at the high. This means we are set to launch through the high at 420.
- Target barely rejected the high (FRONTRUN) and found reasonable support on the same supports it FRONTRAN. Target is poised to go crazy high.
- Nike looks like it can do anything.
- CVS also looks like it can do anything but looks more bearish tbh.
WBA Walgreens Boots Alliance Options Ahead of EarningsIf you haven`t sold WBA here:
Then analyzing the options chain and the chart patterns of WBA Walgreens Boots Alliance prior to the earnings report this week,
I would consider purchasing the 23usd strike price Calls with
an expiration date of 2023-10-13,
for a premium of approximately $0.54.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
Walgreens Boots Alliance: The end is near.. 👀But thank god we mean the end of the current downtrend. The price is currently in the magenta wave , which it should complete in our green target zone between $27.30 and $24.10. With this, our white wave (II) is also coming to an end and thus a change in direction is imminent. Here, long orders can be placed well, since significant increases are to be expected afterwards. Attention should be paid to the alternative scenario with a probability of 38%. If this occurs, the increases are significantly shorter.
WBA Walgreens Boots Alliance Options Ahead of EarningsIf you haven`t sold WBA here:
Then Analyzing the options chain of WBA Walgreens Boots Alliance prior to the earnings report this week,
I would consider purchasing the $32.5 strike price Calls with
an expiration date of 2023-10-20,
for a premium of approximately $1.62.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
WBA Walgreens Boots Alliance Options Ahead of EarningsLooking at the WBA Walgreens Boots Alliance options chain ahead of earnings , I would buy the $30 strike price Puts with
2023-6-16 expiration date for about
$1.01 premium.
If the options turn out to be profitable Before the earnings release, I would sell at least 50%.
Looking forward to read your opinion about it.
Walgreens Boots Alliance: Take Your Medicine 💊Walgreens Boots Alliance should take its medicine as the share needs some more strength to make it above the resistance at $42.29. From there, the course should rise into the green zone between $52.38 and $59.29 to conclude wave 3 in green before we anticipate a countermovement. A 38% chance remains, though, that WBA could drop below the support at $32.70 instead, subsequently slipping below the support at $30.39 as well.
$WBA Cheap & OversoldWalgreens Boots is a very stable business with over 9,000 drug store locations across the states giving it low downside risk, valuation is cheap at 14.91 times earnings and a 4.37% dividend yield. Technically speaking price is below the lower Buy Sell Band, Range Strength and Hurst Exponent both indicate price is in a non-trending mode, and the RSI shows it's oversold and currently 6.81% below the 50 day MA making a nice long play here back up to the 50 day MA.
WalgreensI see a possible M pattern forming here. I'm thinking about more people being sick and pharmacy visits over the cold winter season. Walgreens is a great convenience store with solid customer service from my experience. They've been around for a long time. I want to see price retrace the previous high up to 38 - 61%. We are currently in consolidation. However, I believe that since that previous was broken and the current low being higher than the previous, I can see WBA respecting that sentiment on a long term scale. The win goes to the longest holder. On the weekly , we are on the bottom of the Mac D as well and looks to be losing its bearish momentum.
Not advice!
💊 Walgreens Boot Alliance LONG: WBA - Trend is your friendHi mates is perfect setup for bullish trend continuation in NASDAQ:WBA
here is data for my trade:
------------------------Trade setup ---------------------------
Entry: 54.65
Stop Loss: 51.91
Profit target: 62.83
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