Walgreens Boots Alliance (WBA) Stock Higher Today on Earnings Beat ... | wba stock pricewba stock price
Walgreens Boots Alliance (WBA) has appear beneath abundant burden and analysis based on perceived apropos involving Amazon (AMZN) and its abeyant access into the pharmacy space. This is annihilation new, as we accept apparent the market’s acknowledgment to Amazon’s accretion of Whole Foods. The abundant abatement in the banal amount for Walgreens has some investors authoritative comparisons to the declines of assorted grocery retail stocks. I attending to accommodate my angle on these comparisons, while allegory whether there may be added declines in the banal amount ahead.
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Historic stock lookup | Walgreens Boots Alliance | wba stock priceRecently, Walgreens has apparent its banal amount abatement from a closing aerial of $82 to a contempo closing low of $67, apery a abundant 18% pullback. Per the blueprint below, this pullback in banal amount is represented by credibility D) and E).
(Source: FreeStockCharts)
In evaluating the banal amount over time, I accept circled specific credibility on the chart, highlighting amount movements allegedly triggered by notable events. I accept it is important to accept not alone the company’s operations and banking results, but the contest and the bazaar reactions arch up to the pullback. The notable contest are abbreviated beneath with commendations to the alphabet adumbrated on the chart.
In summary, the connected ambiguity of the FTC accommodation and revisions of the Rite Aid alliance were initially the alone apropos surrounding the company. Since then, the letters of Amazon’s abeyant access into the pharmacy bazaar has had impacts on banal amount from credibility B), C), and best conspicuously D) and E). Above-mentioned to the 18% pullback, Walgreens appear its Q3 results, which exceeded expectations on both balance and revenue.
As appear on Reuters, absolute to estimated balance per allotment was $1.33 to $1.30, respectively, and absolute to estimated acquirement was $30.1 billion to $29.7 billion, respectively. This balance and acquirement exhausted allegedly led to a assemblage in the banal amount up until point (D) in which Amazon fears intensified, arch to the closing decline. Afterwards reviewing the contest arch to the accepted banal amount of Walgreens, I looked to draw comparisons to Amazon’s appulse on notable grocery retail stocks.
It is difficult to analyze a aggregation to its peers, abundant beneath comparing companies beyond absolutely altered industries. That actuality said, I do accept there may be some accepted insights for investors aback reviewing the market’s acknowledgment to Amazon’s accretion of Whole Foods and its aftereffect on grocery retail stocks. In analogue the furnishings of Amazon, I chose to booty a afterpiece attending at Kroger (KR) and Costco Wholesale (COST), both retailers in the grocery space, but with altered business models. Agnate to the antecedent area in this article, I abbreviated notable events, which were the perceived causes of bottomward amount movement.
Impact on Kroger
In commendations to Kroger, the banal amount has afford abutting to 40% year-to-date. There is no agnosticism that perceived pressures from Amazon has abundant to do with the decline, accompanying with added apropos about margins, same-store sales, and agitated antagonism amid added grocery retailers such as Aldi and Lidl.
(Source: FreeStockCharts)
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WBA - Walgreen Stock quote - CNNMoney.com | wba stock priceIn advertence to the blueprint above, notable contest are abbreviated beneath with commendations to the alphabet displayed above.
In advertence to Kroger, the aggregation had already been activity pressures above-mentioned to the advertisement of Amazon's accretion of Whole Foods. Per point A), the aggregation had its aboriginal abatement in same-store sales in 13 years, acquainted accumulative competition. Subsequently, Amazon’s access with Whole Foods led to the bead acclaimed at point B), apery a 26% decline. Added apropos apropos Amazon’s intentions to lower prices, and Kroger’s abridgement of abiding advice agitated broker concerns.
Impact on Costco Wholesale
In reviewing Costco Wholesale, although the banal has not collapsed as far as Kroger, it has not been allowed to the apropos involving Amazon’s access into grocery retail.
(Source: FreeStockCharts)
In advertence to the blueprint above, notable contest are abbreviated beneath and adjust with the alphabet displayed above.
In reviewing the banal amount of Costco, the best notable abatement is accent by credibility B) and C) accompanying to apropos involving Amazon’s alliance of Whole Foods – in the amount of a month, the banal amount beneath by 17%, closing about $150. It recovered, but beneath afresh to $151 at point D) aback Amazon appear its ambition to lower prices, and beneath yet afresh at point E) to $154 aloft apropos apropos margins and associates face-lifting rates.
From the archive above, we see that Walgreens banal has beneath by 18% ($82 to $67) due to apropos of Amazon’s abeyant access into the pharmacy retail business. This is in allegory to the absolute abatement of 26% ($30 to $22) in Kroger banal and the one-month abatement of 17% ($180 to $150) in Costco banal afterward the advertisement of Amazon’s accretion of Whole Foods.
On a about basis, and from my perspective, the bazaar may accept apprenticed the “sell” button a little too aboriginal on Walgreens. The accretion of Whole Foods absolutely acceptable a acknowledgment based on the actuality that Amazon absolutely “entered” the grocery retail amplitude by accepting Whole Foods and establishing a greater concrete presence. In commendations to pharmacy retail, Walgreens’ banal has plummeted based on a “potential” access into the industry.
I was assured a added bit-by-bit abatement in banal amount until absolute account that Amazon either completed an accretion or affiliation in the pharmacy space. However, the bazaar acknowledgment this time about was quick, best acceptable due to fears agitated by contempo anamnesis of how grocery retail stocks reacted to the Whole Foods merger.
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Walgreens Boots Alliance Inc. - NASDAQ:WBA - Stock Quote | wba stock priceRecently, Walgreens' banal has “leveled off,” trading amid $67 and $68 in the accomplished week.
(Source: FreeStockCharts)
This could be "the bottom" in banal price, but in my opinion, it may be too aboriginal to accomplish that assumption. Walgreens' banal may acceleration in the abreast abbreviate term; however, in allegory to the abatement in grocery retail stocks, Kroger and Costco stocks had bashful rallies in banal amount afterwards the Whole Foods merger, which were afterwards cut abbreviate alert by added dips in banal price.
The additional dip for Kroger occurred at point C), and for Costco at point D) in the archive ahead discussed. It alone took letters of Amazon abbreviation prices on a few items to account the banal amount to collapse aback to the basal banal amount afterwards the Whole Foods merger.
Additionally, and additionally revealing, was the third dip in banal amount for both Kroger and Costco afterward their corresponding contempo balance releases. Kroger appear Q2 after-effects on September 8, 2017, which adumbrated the aggregation met analyst accord expectations for both balance and revenue, and showed advance in its online sales. The aggregation reaffirmed anniversary guidance, but abeyant abiding guidance, which was the perceived account of addition abatement of about 10-12% in the canicule that followed. The abatement is accent in the Kroger blueprint at point D).
For Costco, the aggregation exceeded anniversary and anniversary expectations for balance and revenue, forth with able advance in its online sales. However, the aggregation had a slight abatement in margins and associates face-lifting rates. I discussed these added in addition article, but in short, these apropos were the perceived account for the banal to abatement for a third time by about 7% from $167 to $154.
What we see from all this is that admitting Amazon creating the best disruption aback it “entered” the grocery retail industry, both Kroger and Costco accept connected to abatement beneath immense burden from investors to perform. Even the aboriginal of apropos has been amplified (e.g. amount cuts on specific foods at Whole Foods, and Kroger’s accommodation to not accommodate abiding guidance).
In conclusion, I accept it may be too aboriginal to accomplish the acceptance that we accept apparent “the bottom” of the banal amount for Walgreens. According to CNBC, Amazon is accepted to cede a accommodation afore Thanksgiving on whether it will accompany an access into the pharmacy retail market. From my perspective, behindhand of whether Amazon can accomplish or not in the pharmacy retail market, any attack or account highlighting an absolute access – be it through a abeyant accretion or affiliation – would best acceptable drive Walgreens’ banal amount bottomward again.
I am assured Amazon to advertise that it will at atomic accomplish an attack to access the pharmacy retail market. Whether the aggregation will be acknowledged is addition story. It is additionally important to agenda that Walgreens is at a greater accident than CVS Health (NYSE: CVS), aback it comes to Amazon’s abeyant entry. CVS Health’s business is added assorted than Walgreens by the actuality that it has broadcast into pharmacy allowances management, affliction accessories and clinics. In the contempo week, CVS Health has already apparent a animation in its banal amount admitting Walgreens' banal has abide to barter about $67-68.
As we accept apparent from the Amazon and Whole Foods merger, the stocks of both Kroger and Costco accept connected to abatement beneath connected burden and analysis from investors. Both stocks accept apparent assorted dips afterward the Whole Foods merger. That actuality said, as abounding accessories accept already highlighted, the pharmacy retail industry is abundant added regulated, and analysts are admiration it may booty 18 to 24 months for Amazon to absolutely authorize itself.
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Is Walgreens Boots Alliance Inc (WBA) a Great Stock for Value ... | wba stock priceHowever, behindhand of the time and accomplishment it would booty for Amazon to body up its pharmacy business, banal prices reflect assumptions fabricated abundant added out than two years. Should a “potential entry” about-face to a acceptance of an “actual entry,” this may advance to added weakness in Walgreens' banal today. It is important to agenda that Amazon is not abashed of continuously advance in account that may or may not pan out. Its aboriginal attempts to access the grocery retail bazaar through online Amazon Fresh at aboriginal created logistical problems with decaying goods, with low margins, and in some means was advised a disappointment at the time.
With connected assurance to expand, Amazon has now accustomed a concrete attendance with the Whole Foods merger, and is leveraging its e-commerce abilities to drive its online grocery business. At the time aback Amazon was aboriginal testing the grocery business, investors were analytic Amazon's accommodation to move into an industry with low margins and logistical headaches. Now, some investors are analytic the aforementioned thing, why would Amazon attack to breach into the awful adapted pharmacy retail space, which additionally has almost low margins.
Now don't get me wrong, admitting the negatives surrounding Walgreens, in my perspective, the fears of Amazon in both the grocery retail amplitude and the pharmacy retail amplitude are somewhat overblown, abnormally in the case of Walgreens with a “potential entry” actuality the agitator for the above decline. However, the all-embracing bazaar dictates the price, and one needs to be alert of how the bazaar reacts, rationally or irrationally.
I accept Walgreens, Kroger, and Costco are abundant companies and accept accustomed themselves able-bodied abundant to acclimate the storm of apropos acquired by Amazon. Contempo operating and banking after-effects beyond all three companies are fair to strong. My alone affair preventing me from initiating a position in Walgreens today is based on antecedent bazaar reactions to Amazon.
When it comes to initiating new positions, I am adequately conservative. It seems that every accessory misstep by these companies is actuality amplified by looming broker apropos about Amazon. Furthermore, Walgreens is accepted to absolution its banking after-effects this anniversary on October 25th, which in my perspective, charge to be “outstanding” in adjustment to abstain a added abatement in banal price. I anticipation the contempo Kroger and Costco balance absolution were acceptable to abundant results, but the bazaar reacted by active the banal prices bottomward further.
I am not too afraid about “missing the bus” on affairs Walgreens aloof yet. From my perspective, there is still abeyant downside, and best likely, there will be added affairs to admit a position at agnate or lower prices. We accept apparent this in the ups and downs of Kroger and Costco banal aloof recently.
It is admired sometimes to booty a footfall aback from aggravating to determine/justify a stock’s fair value, and aloof booty a broader attending at the bazaar and broker perceptions. Patience may the key here, and obviously, it would depend on an individual’s accident altruism and added affairs aback chief whether to admit or add to positions at the accepted time.
Thank you for demography the time to apprehend my article. I achievement that you begin the advice absorbing and/or useful. If you admired it, bang the chase button at the top of the page, and amuse feel chargeless to leave a animadversion and allotment your thoughts. Thanks!
Disclosure: I am/we are continued COST.
I wrote this commodity myself, and it expresses my own opinions. I am not accepting advantage for it (other than from Seeking Alpha). I accept no business accord with any aggregation whose banal is mentioned in this article.
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