Walgreens’ Latest Update Made It Look A Little Ill

Walgreens’ Latest Update Made It Look A Little Ill
Daniel Johnston

8 months ago2 mins

Mentioned in story

What’s going on here?

Walgreens Boots Alliance coughed up some grim quarterly figures on Tuesday, leaving investors worried about its health.

What does this mean?

You don’t need an MD to see that Walgreens’ past quarter wasn’t particularly healthy. Sure, vaccinations were always going to drop when the US declared an end to the Covid public health emergency – but an 83% plunge was steeper than anyone expected. Toss in near-static prescription fillings and dwindling same-store sales in its retail segment, and it’s clear Walgreens has got a whole cluster of sickly symptoms. That meant the firm missed its earnings bullseye for the first time since 2020. To fix that and lift profitability, Walgreens is tightening its belt even more, but the titan still felt compelled to chop its full-year profit forecast. For investors, that was a bitter pill to swallow – and shares tumbled 9%.

Walgreens stock
Source: Google Finance

Why should I care?

The bigger picture: Recuperation, but no rest.

Even under the weather, Walgreens has got a game plan. Recent acquisitions show that the company’s going from a pharmacy chain to a fully-fledged healthcare company – and while it may take time for those moves to yield big results, there’s one tailwind that could speed things up. See, Walgreens operates a unit that helps biotechs recruit diverse patient demographics for clinical trials, making use of its huge retail network. And with rival CVS retreating from that line of work, Walgreens will be left to pick up its business.

Walgreens closing stores
Source: Bloomberg

Zooming out: The other kind of belt-tightening.

Speaking of clinical trials, the results of Eli Lilly’s latest one are out: its highly anticipated experimental weight loss drug has been shown to help patients drop up to 24% of their body weight within a year – a record-breaker in the obesity space. If further trials are successful and the drug gets to market, analysts reckon it could prove to be the highest-selling (legal) drug of all time…



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG