Andrew Labutka • Thu, Dec. 25
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- As anticipated, Walgreen's first-quarter results topped expectations.
- Walgreen reported EPS of $.81 on revenue of $19.6 billion.
- The results sent shares to an all-time high of $77.22.
Update: Walgreen Earnings Put The Green In Walgreen
- WAG reported fiscal first-quarter results.
- The results raised my confidence in WAG.
- The results were fantastic and even managed to top my already high expectations.
Walgreen's Q1 Earnings Beat Has Sent Its Shares Higher, Should You Consider A Position Into The Rally?
- Q1 2015 earnings were released on December 23.
- Earnings per share and revenue beat expectations.
- Filled a record 222 million prescriptions during the quarter.
- Returned more than $800 million to shareholders via dividends and share repurchases.
- The stock has responded by rising.
- Walgreen is set to release first quarter results before the opening bell on Tuesday morning.
- According to Yahoo! Finance, analysts will be expecting EPS of 75 cents on revenue of $19.5 billion.
- Other issues investors will be listening for include details on the Alliance Boots acquisition and headwinds from generic drug inflation.
Walgreen First Quarter Earnings Preview: Making New Highs
- Walgreen is currently trading above the average analyst price target.
- Shares are highly volatile and options may help long-term investors cope with earnings.
- Walgreen is attractive compared to its peers, especially with its dividend yield.
The Impact Of Walgreen's New Application Offering 24-Hour Medical Care
- Walgreen has recently undertaken an innovative new initiative whereby the company will provide tele-healthcare services to customers for conditions that don't require a physical examination.
- Walgreen reported fairly impressive financial performance for Q4. Top line growth was solid, but bottom lines worsened, owing to the increased pressure on margins, especially gross margins.
- Through its new mobile app, which has been developed in collaboration with MDLive Care, Walgreen customers will be able to make virtual visits to the doctor.
- Walgreen’s extended healthcare technology will cater to the increasing demand for stay-at-home healthcare services and compensate for revenues previously not realized due to health insurance.
- At present, Walgreen represents a highly worthy prospect for long-term as well as short-term investors. Now is definitely an ideal time to buy into the company’s stock.
- Alliance Boots merger is positioning WAG as a long-term global leader.
- Expect a long-term transition to health services, versus just drugstores.
- WAG appears only modestly undervalued after a 10% gain in two days.
Walgreen Breaks Out To New Highs, Further Upside Ahead
- The recent stellar advance in the shares of Walgreen has made the recent market sell-off a bit easier to take.
- The shares have taken off upon the announcement of the current CEO's retirement once the Allied Boots merger is completed.
- I expect further upside ahead as detailed below.
- CEO Greg Wasson isn't retiring, he was pushed out by Alliance Boots chair Stefano Pessina.
- Makeovers of Walgreens stores may end as a result, with more focus on supply chains and operations.
- Expect a tax inversion to boost the stock price.
- Walgreen is my second pick for the long-run after Starbucks.
- Once the acquisition of Alliance Boots is complete, Walgreen will be a global pharmacy juggernaut.
- There are several reasons to own Walgreen for the long-run and the rewards look to outweigh the risks.
Walgreen: Could Dividend Growth Revert To 20% Level?
- Dividend growth may re-accelerate in the near term given Walgreen's strong cash flow and earnings growth potential, as well as its currently healthy payout level.
- There could be a potential increase in share repurchases, making the 20% dividend growth scenario very possible.
- Based on a 2-stage dividend discount model, potential price upside can reach $15 or 23%.
Walgreen Co. - A 5-Star Stock Trading At A Discount, But Is It Enough?
- Walgreen Co. is the largest U.S. retail drug chain in terms of revenues. The company operates more than 8,000 drug stores throughout the U.S. and Puerto Rico.
- In August 2014, the company exercised its option to acquire the remaining 55% of Alliance Boots for $5.3 billion in cash and 144.3 million shares in WAG stock.
- The company faces several headwinds including margin pressures, adverse changes in the pharmacy business environment, increased uses of generic drugs, a shift toward 90-day mail-order and retail prescription refills.
- Walgreen has recouped quite a bit of the share price it lost in August.
- Investors were quite short-sighted, in my opinion, in dumping shares of Walgreen.
- By not pursuing a tax inversion deal, management has been validated by recent Treasury department rule changes making the move less advantageous.
- The shares continue to offer a compelling, low-risk play in the healthcare field.
Should Walgreen Be In A Dividend Growth Portfolio?
- The stock is inexpensively valued based on 2015 earnings estimates.
- The company has great earnings growth expectations.
- The technicals show a favorable reward/risk ratio.
Dividend Aristocrats In Focus Part 26 Of 54: Is Walgreen Healthy Or In Need Of Medication?
- Walgreen has increased its dividend payments for 39 consecutive years.
- The company is in transition with the planned acquisition of the remaining 55% of Alliance Boots.
- Does the company have solid growth prospects after backing out of its planned tax inversion?
- Walgreen announced its financial results for Q4 2014 and the results for full year FY 2014. The results were impressive, although the retailer noticed some dips in certain areas.
- The beginning of FY 2015 marked a surge in sales for the month of September. Sales rose by 9.4% in that month alone, indicating that some of the initiatives pursued.
- The company has set a large outlook for synergies in the future and intends to spend almost $650 million in FY2015 for this purpose.
- The company aims to achieve cost savings worth $1 billion by FY 2016 - a rather bold, but achievable, target.
- Walgreen has managed to strike some lucrative deals such as collaborations with WebMD and Express Script holdings, while its earlier alliance with Boots has begun performing for the company.
Sun, May. 18, 4:07 AM
- Walgreen (WAG) is thinking about buying the 55% in European peer Alliance Boots it doesn't own, The Sunday Times reports.
- Taking inspiration from Pfizer in its pursuit of AstraZeneca, Walgreen would then move its domicile to the U.K. or Switzerland in order to lower its tax rate and save billions of dollars a year.
- Walgreen purchased 45% of Boots in 2012 in a cash-and-stock deal worth $6.7B and has a three-year option to acquire the rest.
Thu, May. 15, 9:22 AM
- Alliance Boots says its collaboration with Walgreen (WAG) has led to synergies piling up ahead of targets.
- Walgreen has a six-month window starting in 2015 to exercise an option to buy the rest of Alliance Boots.
- Related: Walgreen inversion - these Alliance Boots are made for walkin'
Mon, May. 12, 11:02 AM
- A plan by Pfizer to acquire AstraZeneca in a move that could help the company lower corporate taxes puts a spotlight back on Walgreen (WAG +0.9%) to make a similar move.
- Hedge funds have been pressing the board at Walgreen to back a relocation as part of its integration of Alliance Boots.
- Speed is of the essence with politicians in Washington D.C. making noise about relocation "inversions" deals.
Thu, May. 8, 7:20 PM
- FedEx (FDX) is changing the way it charges to ship bulky packages; instead of charging by weight alone, all ground packages soon will be priced according to size, which effectively will raise prices on more than a third of its U.S. ground shipments.
- Such a move would greatly affect bulky but lighter weight items like toilet paper and diapers, but the changes also would profoundly affect Web retail shoppers, who often buy multiple clothing or footwear items - perhaps with free shipping - then keep what fits and return the rest.
- For Amazon (AMZN) and other big online retailers, shipping is already one of the biggest and most rapidly increasing costs; e-commerce retailers likely would be affected by differing degrees, with the biggest companies such as Wal-Mart (WMT), Walgreen (WAG) and Saks (SKS) having advantages in their ability to negotiate pricing with FDX.
- UPS has not yet followed FDX's move, but the two companies historically have matched each other's price increases.
Mon, May. 5, 8:45 AM
- Walgreens (WAG) says same-store sales rose 7.6% Y/Y in April, benefiting from a later Easter, which fell on April 20 this year.
- In the front end, same-store sales rose 8.2%; customer traffic on a same-store basis improved 2.6% and basket size rose 5.6%.
- Pharmacy segment same-store sales rose 7.3%, and same-store pharmacy prescriptions filled rose 3.5%; pharmacy sales accounted for 65% of WAG's total sales in April.
Mon, Apr. 14, 1:44 PM
- A number of hedge funds with a piece of Walgreen (WAG +2.5%) are pressing the firm to relocate to Europe for tax purposes.
- The group thinks the company's ownership in Alliance Boots gives it the avenue to make the transition.
- Walgreen isn't considering the option at the moment, according to reports.
Fri, Apr. 11, 4:01 AM
- The White House has confirmed that Health & Human Services Secretary Kathleen Sebelius is resigning and will be replaced by Sylvia Burwell, the director of the Office of Management & Budget, assuming the latter is confirmed by the Senate.
- Sebelius' departure comes after she said in October that she should be held "accountable for the debacle" of the launch of Obamacare, although the program did reach the government's target of 7M sign-ups by the end of March. She said yesterday that at least 7.5M people have enrolled.
- One of Burwell's first challenges will be to work with health insurers as they set prices for Obamacare plans in 2015, which industry executives have warned could rise sharply.
- More on Obamacare
- Health insurers: AET, HNT, HUM, UNH, WLP, MO
- Hospital operators: HCA, CYH, THC, UHS, HMA, LPNT
- Pharmacies: WAG, CVS, BIOS, RAD, MHS, PMC, OCR
- ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS
Thu, Apr. 10, 10:57 AM
- Per CVS Caremark's (CVS) Insights report prescription drug trend rose 3.8% last year versus flat growth in 2012. Growth drivers were price inflation and increased utilization (more prescriptions per member).
- Specialty medications that treat more complex diseases grew by 15.6%.
- The company generates the report, which includes an outline of cost containment strategies, to assist payers with their management of prescription drug spending.
- Drug trend is the measure of growth in prescription spending per member per month.
- The generic dispensing rate was 81.4%.
- (RAD) (WAG)
Wed, Apr. 9, 1:52 PM
Thu, Apr. 3, 1:17 PM
- The buyer is Water Street Health Care Partners, and Walgreens (WAG +0.8%) will retain a minority stake in Take Care and be the preferred strategic partner with Water Street.
- Take Care is a Walgreens subsidiary managing over 360 worksite health centers across the country. At the same time, Water Street has agreed to get a piece of CHS Health Care Services, a provider of 130 worksite health centers.
- Financial terms were not disclosed and Walgreens doesn't expect the deal to have a material impact this fiscal year.
- Press release
Thu, Apr. 3, 11:59 AM
- Rite Aid (RAD +2.6%) joins Walgreen (WAG +0.8%) in reporting higher same-store sales for March; RAD says same-store sales climbed 0.7% and pharmacy comps rose 3.5% helped by a 1.1% increase in prescriptions, but front-end sales slipped 5% due in part to a late Easter.
- Alan Stacy's calculation shows total drugstore sales for the month, which rose 0.4% to $1.95B, would have increased by 1.7% if Easter had fallen in March.
- Earlier: Walgreen comp sales up 3.5%.
Thu, Apr. 3, 9:48 AM
- Overall sales of $6.43B were 4.5% higher than a year ago, with sales in comparable stores up 3.5%. With Easter not coming until April 20 this year, total front-end sales fell 2.6% in March, and comparable front-end sales fell 3.4%.
- Walgreen (WAG +0.9%) March pharmacy sales increased 8.9%, with comparable store pharmacy sales up 8% (adjusting for calendar day shift, sales were up 7.1%).
- Press release
Wed, Mar. 26, 7:32 AM
- Amidst the flurry of regulatory warnings to Indian generic drug manufacturers, other firms will quickly step in to satisfy demand. Those who can demonstrate a strong emphasis on quality will have an edge.
- India's Ranbaxy Labs, the largest manufacturer by sales, had its products banned by the FDA in January because of repeated quality problems.
- (ACT) (TEVA) (MYL) (CVS) (WAG)
Wed, Mar. 26, 7:16 AM
- Execs with Walgreen (WAG) dodged a question during the firm's earnings call yesterday on if the company planned to cease selling tobacco products.
- The company didn't disclose any plans to follow the lead of CVS Caremark in exiting the tobacco market, but also pointed toward its products which are geared toward smokers looking to quit.
- "We think we are well positioned to help folks change their behavior who want to quit," said CEO Greg Wasson.
- Reading between the lines, a wait-and-see approach appears to be in place on tobacco for Walgreen.
- Earnings call transcript
Tue, Mar. 25, 11:46 AM
- Walgreen (WAG +3.1%) CEO Greg Wasson says the company will close 76 unprofitable stores in the second half of the company's fiscal year.
- Most of the locations will be ones that are situated in close proximity to another Walgreens.
- The synergies from the Alliance Boots acquisition will continue to be a bottom-line driver for the company. By all accounts, the integration is on schedule.
- The combination of a harsh winter and a mild flu season cut into store traffic and margins during FQ2, according to execs.
- Earnings call transcript
Tue, Mar. 25, 7:46 AM
- Walgreen (WAG) reports comparable-store sales rose 4.3% during FQ2.
- Customer traffic slipped 1.4% due in part to tough weather trends, while the average basket size rose 3.4% as customers made the most out of their reduced trips to Walgreens outlets.
- Total prescription sales were up 7% for the period as the Walgreens chain increased its retail prescription market share by 20 bps to 19.0%.
- The company says combined synergies for Walgreen and Alliance Boots was $236M for the first half of its fiscal year.
- An enrollment of 80M active members in Walgreen's Balance Rewards loyalty program at the end of the quarter looks downright formidable.
- WAG +0.2% premarket
WAG vs. ETF Alternatives
Walgreen Co together with its subsidiaries operates drug-stores chain in the United States. It provides consumer goods and services, pharmacy, and health and wellness services through drug-stores, as well as mail, and by telephone and online.
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