Seeking Alpha
Profile| Send Message|
( followers)  

Walgreen Co. (NYSE:WAG), together with its subsidiaries, operates a chain of drugstores in the United States. It sells prescription and non-prescription drugs; and general merchandise, which include household products, convenience and fresh foods, personal care, beauty care, candy, photofinishing products, and seasonal items, as well as home medical equipment, contact lens, vitamins and supplements, and other health and wellness solutions.

It is scheduled to report its Q3 2012 results on June 26, 2012, before the market opens.

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last quarters. In the last quarter it reported $0.78 EPS, beating analyst estimates of $0.77.

The consensus EPS is $0.62 based on 21 analysts' estimates, down from $0.65 a year ago. Revenue estimates are $17.87B, down from $18.37B a year ago. The median target price by analysts for the stock is $37.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On March 28, 2012, UBS reiterated Buy rating for the company.
  • On February 9, 2012, Macquarie Capital Markets Canada Ltd upgraded the company from Hold to Strong Buy.
  • On December 22, 2011, the company was upgraded from Mkt Perform to Outperform at Barrington Research.

Key Metrics

  • Market Cap: 26.64B
  • 52-week trading range: 29.80 - 45.34
  • Trailing P/E: 10.53
  • Forward P/E: 10.72
  • Price/Sales: 0.36
  • Price/Book: 1.80
  • PEG Ratio: 1.22
  • Total Debt: 2.39B
  • Annual dividend yield: 2.90%
  • Return on Equity: 17.85%
  • Return on Assets: 9.27%

Latest Developments

  • On June 4, 2012, Walgreens announced an extended, multi-year agreement in which Walgreens will build on its strategic partnership with OptumRx, one of the pharmacy benefit managers in the United States.
  • On May 30, 2012, Walgreen Co's Take Care Health Systems and The Valley Health System announced a new relationship that will facilitate greater clinical coordination and enhance access to convenient and affordable health care options available at Take Care Clinics in Southern Nevada.
  • On May 7, 2012, Walgreen Co announced that it has completed its acquisition of certain assets of BioScrip, Inc.'s community specialty pharmacies and centralized specialty and mail service pharmacy businesses.
  • On February 16, 2012, Walgreen Co and Greystone Healthcare Management announced that they have launched a collaborative therapy management pilot program at the Lady Lake Specialty Center in Lady Lake, Fla., aimed at enhancing medication adherence and reducing readmissions rates for patients in post-acute care settings.
  • On February 2, 2012, Walgreen Co and BioScrip Inc announced that they have entered into a definitive agreement under which Walgreens would acquire certain assets of BioScrip's community specialty pharmacies and centralized specialty and mail service pharmacy businesses and BioScrip would receive a total deal value of approximately $225 million.
  • On January 30, 2012, Walgreen Co announced a definitive agreement in which the company will acquire the prescription files and inventory from 33 Kmart pharmacies in 16 states.

Competitors

Walgreen Co. operates in Drug Stores industry. The company could be compared to GNC Holdings Inc. (NYSE:GNC), Rite Aid Corp. (NYSE:RAD), Sally Beauty Holdings Inc. (NYSE:SBH), and Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)WAG Chart

WAG data by YCharts

Competitors' Latest Development

  • On June 13, 2012, Reuters reported that CVS Caremark Corporation and Rite Aid Corporation filed an antitrust lawsuit accusing Pfizer Inc and Teva Pharmaceutical Industries Ltd of conspiring to keep generic versions of antidepressant Effexor XR off store shelves.
  • On June 5, 2012, Ulta Salon Cosmetics and Fragrance Inc announced that for the second quarter of 2012, it expects net sales in the range of $466 million to $473 million and income per diluted share (EPS) to be in the range of $0.49 to $0.51.
  • On May 25, 2012, Rite Aid Corporation announced that its Board of Directors has elected John T. Standley, who is currently President, Chief Executive Officer (CEO) and a member of the Company's Board of Directors, to the additional position of Chairman of the Board, effective June 21, 2012 at the Company's annual stockholder meeting.
  • On May 15, 2012, Rite Aid Corporation announced that it has closed its previously announced offering of an additional $421.0 million aggregate principal amount of 9.25% Senior Notes due 2020 (the "New Notes").
  • On May 15, 2012, Sally Holdings LLC (the Company), a wholly-owned subsidiary of Sally Beauty Holdings Inc announced the pricing of its previously announced public offering of $700 million aggregate principal amount of 5.75% Senior Notes due 2022 (the Senior Notes).
  • On May 14, 2012, Ulta Salon Cosmetics and Fragrance Inc announced that the underwriters of the public offering of 7,000,000 shares of its common stock held by certain entities associated with Mousse Partners have exercised in full their option to purchase an additional 1,050,000 shares from one of the selling stockholders.
  • On May 7, 2012, Sally Beauty Holdings Inc announced the underwritten public offering of 15,000,000 shares of its common stock held by investment funds associated with Clayton, Dubilier & Rice, LLC (the CDR Investors) pursuant to the Company's shelf registration statement filed with the Securities and Exchange Commission.
  • On May 7, 2012, Ulta Salon Cosmetics and Fragrance Inc announced that for the first quarter of 2012, it expects net sales to be $474 million, compared to previous guidance of $452 million to $460 million, comparable store sales to increase 10.1%, exceeding the Company's previous guidance for comparable store sales to increase in a range of 6% to 8%, income per diluted share to be in the range of $0.52 to $0.53.
  • On May 4, 2012, Rite Aid Corporation announced the pricing of an offering of an additional $421.0 million aggregate principal amount of 9.25% senior notes due 2020 (the "Notes") at a price of 101.25% which will result in total proceeds of approximately $426.3 million.
  • On April 25, 2012, GNC Holdings Inc announced that the Company's Board of Directors has authorized and declared a cash dividend of $0.11 per share of its common stock for the second quarter of 2012, payable on or about June 29, 2012 to stockholders of record at the close of business on June 15, 2012.
  • On April 25, 2012, GNC Holdings Inc raised fiscal 2012 guidance and expects consolidated revenue of approximately $2.37 billion, a 14.5% increase over fiscal 2011 consolidated revenue of $2.07 billion.
  • On April 12, 2012, Rite Aid Corporation announced that for fiscal 2013, it expects sales to be between $25.4 billion and $25.8 billion with same stores sales expected to range from flat to an increase of 1.5% over fiscal 2012, adjusted EBITDA is expected to be between $925 million and $1.025 billion.
  • On March 8, 2012, Ulta Salon Cosmetics and Fragrance Inc announced that for the first quarter of 2012, it expects net sales in the range of $452 million to $460 million, income per diluted share to be in the range of $0.46 to $0.48, this includes approximately a $0.01 impact driven by incremental pre-opening expense from its accelerated new store program, and comparable stores sales to increase in the range of 6% to 8%.
  • On February 16, 2012, GNC Holdings Inc announced that for fiscal 2012, it expects consolidated revenue of approximately $2.28 billion, this is based on achieving a mid-single digit domestic retail same store sales increase for fiscal 2012, excluding the impact of GNC.com which in 2011 contributed approximately 140 basis points to the total reported same store sales increase of 10.1%.
  • On February 16, 2012, GNC Holdings Inc announced that it has authorized and declared a cash dividend of $0.11 per share of its common stock for the first quarter of 2012, payable on or about March 30, 2012 to stockholders of record at the close of business on March 15, 2012.
  • On February 6, 2012, Sally Beauty Holdings Inc announced the underwritten public offering of 20,000,000 shares of its common stock held by investment funds associated with Clayton, Dubilier & Rice, LLC (CDR Investors) pursuant to the Company's shelf registration statement filed with the Securities and Exchange Commission.
  • On December 15, 2011, Rite Aid Corporation announced that for fiscal 2012, it expects sales to be between $25.85 billion and $26.0 billion, same store sales to range from an increase of 1.15% to an increase of 1.75% over fiscal 2011 and adjusted EBITDA (which is reconciled to net loss in the attached table) to be between $865 million and $910 million.

Technical Insight


The stock is trading at close to the lowest levels in the last year, below 50 and 200 SMA on the daily chart.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Walgreen