Earnings Preview: Walgreen Co.

| About: Walgreens Boots (WBA)

Walgreen Co. (WAG), together with its subsidiaries, operates a drugstore chain in the United States. The company provides its customers with multichannel access to consumer goods and services, and pharmacy, health and wellness services in communities across America. Walgreen offers its products and services through drugstores, as well as through mail, by telephone, and via the Internet.

Walgreen is scheduled to report its third quarter earnings results on June 26, 2012, before market open.

Technical Overview

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Walgreen has a market cap of $27.44 billion and it is currently trading around $31.80 with a 52-week range of $29.80 to $45.34. The stock has fallen 3.81% year to date. The following table provides the key financial ratios for Walgreen:

Key Ratio Value
Current Ratio 1.55
PEG 1.03
P/E 10.85
Forward P/E 11.08
Profit Margin 3.60%
Return On Assets (ROA) 9.84%
Return On Equity (ROE) 17.85%

Recent News

  • On June 06, 2012, Walgreen Alan E. London, M.D., Chief Medical Officer of Take Care Health Systems Consumer Solutions Group.
  • On June 05, 2012, Walgreen reported its May sales of $5.98 billion, a decrease of 1.6% from $6.08 billion for the same month in fiscal 2011.
  • On June 04, 2012, Walgreen announced an extended, multi-year agreement in which Walgreens will build on its strategic partnership with OptumRx, one of the largest pharmacy benefit managers in the United States.
  • On June 01, 2012, Walgreen issued the following statement about a dispute with Express Scripts (NASDAQ:ESRX) filed in September 2011: "The parties have agreed to dismiss their respective claims, and no other action has been or will be taken by either party with respect to this case. These dismissals have no impact on the parties' ability or inability to come to terms on a pharmacy agreement. The parties and their counsel will have no further comment on this matter."
  • On May 15, 2012, Walgreen introduced a new and improved Prescription Savings Club program - providing members greater value and covering a more comprehensive range of medications than any similar offering by any major drugstore chain in the marketplace.
  • On May 14, 2012, Walgreen launched national initiative to help create more job opportunities for people with disabilities.
  • On May 09, 2012, Walgreen announced it has selected GSD&M to be its new brand and creative agency of record. The relationship will include broadcast, print and outdoor marketing efforts, as well as digital activation and creative.
  • On May 07, 2012, Walgreen announced that it has completed its acquisition of certain assets of BioScrip, Inc.'s (NASDAQ:BIOS) community specialty pharmacies and centralized specialty and mail service pharmacy businesses.
  • On May 03, 2012, Walgreen reported its April sales of $5.78 billion, a decrease of 3.7% from $6.0 billion for the same month in fiscal 2011.
  • On April 24, 2012, Walgreen launched a new online "Find Your Pharmacist" tool that allows customers to select a pharmacist by matching their health care needs with the areas of expertise, specialties, languages and clinical backgrounds of Walgreens pharmacists.
  • On April 18, 2012, Walgreen named Reuben Slone senior vice president of supply chain management.
  • On April 10, 2012, Walgreen announced that Jan Babiak, a retired managing partner for Ernst & Young, LLP, has been elected to its board of directors.
  • On April 04, 2012, Walgreen reported its March sales of $6.02 billion, a decrease of 4.3% from $6.29 billion for the same month in fiscal 2011.

Here's a list of recent changes to analyst ratings:

  • On June 11, 2012, Thomas White/Global Capital upgraded Walgreen from NEUTRAL to MOST FAVORABLE.
  • On June 4, 2012, Stifel Nicolaus initiated Walgreen with a BUY and set the price target as $15.00.
  • On June 4, 2012, Ned Davis Research downgraded Walgreen from BUY to NEUTRAL.
  • On May 8, 2012, Thomas White/Global Capital downgraded Walgreen from MOST FAVORABLE to NEUTRAL.
  • On May 7, 2012, Ned Davis Research upgraded Walgreen from NEUTRAL to BUY.
  • On April 19, 2012, EVA Dimensions, LLC downgraded Walgreen from OVERWEIGHT to HOLD.

Analyst Guidance and Earnings History

The third quarter revenues are expected to be $17.87 billion when compared to $18.37 billion for the same quarter last year. Earnings per share for the third quarter are expected to be 62 cents a share, down from a 65 cents a share in the year-ago period.

The average price target from analyst for Walgreen is $36.75, with an average rating of OVERWEIGHT. Out of the last 4 quarters, Walgreen has met or exceeded the EPS estimates 3 times. The following chart shows the Analyst estimates history and the actual EPS results:

The following chart shows the annual summary of Sales and Net income for Walgreen:

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Finviz and investor sites.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in WAG, ESRX over the next 72 hours.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

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Tagged: , Drug Stores, Earnings
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