WALGREENS BOOTS ALLIANCE INC (WBA)

US9314271084 - Common Stock

9.55  +0.2 (+2.14%)

After market: 9.54 -0.01 (-0.1%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to WBA. WBA was compared to 43 industry peers in the Consumer Staples Distribution & Retail industry. Both the profitability and financial health of WBA have multiple concerns. WBA is valued correctly, but it does not seem to be growing.



3

1. Profitability

1.1 Basic Checks

WBA had positive earnings in the past year.
In the past year WBA had a positive cash flow from operations.
In multiple years WBA reported negative net income over the last 5 years.
Each year in the past 5 years WBA had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of -10.66%, WBA is doing worse than 81.40% of the companies in the same industry.
Looking at the Return On Equity, with a value of -82.69%, WBA is doing worse than 86.05% of the companies in the same industry.
With a Return On Invested Capital value of 5.93%, WBA perfoms like the industry average, outperforming 53.49% of the companies in the same industry.
WBA had an Average Return On Invested Capital over the past 3 years of 3.98%. This is below the industry average of 8.45%.
The last Return On Invested Capital (5.93%) for WBA is above the 3 year average (3.98%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA -10.66%
ROE -82.69%
ROIC 5.93%
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%

1.3 Margins

With a Operating Margin value of 2.75%, WBA perfoms like the industry average, outperforming 53.49% of the companies in the same industry.
In the last couple of years the Operating Margin of WBA has declined.
WBA's Gross Margin of 17.96% is on the low side compared to the rest of the industry. WBA is outperformed by 67.44% of its industry peers.
WBA's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 2.75%
PM (TTM) N/A
GM 17.96%
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%

1

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WBA is destroying value.
WBA has about the same amout of shares outstanding than it did 1 year ago.
WBA has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WBA is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.33 indicates that WBA is not a great score, but indicates only limited risk for bankruptcy at the moment.
WBA has a Altman-Z score of 2.33. This is in the lower half of the industry: WBA underperforms 65.12% of its industry peers.
WBA has a Debt/Equity ratio of 0.86. This is a neutral value indicating WBA is somewhat dependend on debt financing.
WBA has a Debt to Equity ratio of 0.86. This is in the lower half of the industry: WBA underperforms 62.79% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.86
Debt/FCF N/A
Altman-Z 2.33
ROIC/WACC0.87
WACC6.79%

2.3 Liquidity

A Current Ratio of 0.68 indicates that WBA may have some problems paying its short term obligations.
WBA has a worse Current ratio (0.68) than 88.37% of its industry peers.
WBA has a Quick Ratio of 0.68. This is a bad value and indicates that WBA is not financially healthy enough and could expect problems in meeting its short term obligations.
WBA's Quick ratio of 0.37 is on the low side compared to the rest of the industry. WBA is outperformed by 67.44% of its industry peers.
Industry RankSector Rank
Current Ratio 0.68
Quick Ratio 0.37

3

3. Growth

3.1 Past

The earnings per share for WBA have decreased strongly by -27.82% in the last year.
WBA shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -13.65% yearly.
Looking at the last year, WBA shows a small growth in Revenue. The Revenue has grown by 6.17% in the last year.
WBA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.22% yearly.
EPS 1Y (TTM)-27.82%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-41.79%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%6%

3.2 Future

The Earnings Per Share is expected to decrease by -1.27% on average over the next years.
WBA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.63% yearly.
EPS Next Y-46.26%
EPS Next 2Y-28.07%
EPS Next 3Y-16.78%
EPS Next 5Y-1.27%
Revenue Next Year2.54%
Revenue Next 2Y2.07%
Revenue Next 3Y1.88%
Revenue Next 5Y1.63%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 3.32, which indicates a rather cheap valuation of WBA.
Based on the Price/Earnings ratio, WBA is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
WBA is valuated cheaply when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.17, which indicates a rather cheap valuation of WBA.
Based on the Price/Forward Earnings ratio, WBA is valued cheaper than 97.67% of the companies in the same industry.
WBA is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 3.32
Fwd PE 6.17

4.2 Price Multiples

97.67% of the companies in the same industry are more expensive than WBA, based on the Enterprise Value to EBITDA ratio.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 2.13

4.3 Compensation for Growth

A cheap valuation may be justified as WBA's earnings are expected to decrease with -16.78% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.07%
EPS Next 3Y-16.78%

6

5. Dividend

5.1 Amount

WBA has a Yearly Dividend Yield of 10.70%, which is a nice return.
WBA's Dividend Yield is rather good when compared to the industry average which is at 2.43. WBA pays more dividend than 100.00% of the companies in the same industry.
WBA's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 10.7%

5.2 History

The dividend of WBA decreases each year by -3.89%.
WBA has been paying a dividend for at least 10 years, so it has a reliable track record.
WBA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-3.89%
Div Incr Years33
Div Non Decr Years33

5.3 Sustainability

The earnings of WBA are negative and hence is the payout ratio. WBA will probably not be able to sustain this dividend level.
WBA's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP-14.59%
EPS Next 2Y-28.07%
EPS Next 3Y-16.78%

WALGREENS BOOTS ALLIANCE INC

NASDAQ:WBA (12/20/2024, 8:00:01 PM)

After market: 9.54 -0.01 (-0.1%)

9.55

+0.2 (+2.14%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)10-15 2024-10-15/bmo
Earnings (Next)01-02 2025-01-02/amc
Inst Owners61.57%
Inst Owner Change-0.95%
Ins Owners0.59%
Ins Owner Change26.64%
Market Cap8.25B
Analysts54.62
Price Target10.2 (6.81%)
Short Float %14.24%
Short Ratio4.05
Dividend
Industry RankSector Rank
Dividend Yield 10.7%
Dividend Growth(5Y)-3.89%
DP-14.59%
Div Incr Years33
Div Non Decr Years33
Ex-Date11-18 2024-11-18 (0.25)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.11%
Min EPS beat(2)-8.17%
Max EPS beat(2)7.95%
EPS beat(4)3
Avg EPS beat(4)12.96%
Min EPS beat(4)-8.17%
Max EPS beat(4)45.52%
EPS beat(8)5
Avg EPS beat(8)5.78%
EPS beat(12)9
Avg EPS beat(12)7.51%
EPS beat(16)13
Avg EPS beat(16)9.45%
Revenue beat(2)2
Avg Revenue beat(2)2.06%
Min Revenue beat(2)0.14%
Max Revenue beat(2)3.97%
Revenue beat(4)4
Avg Revenue beat(4)2.67%
Min Revenue beat(4)0.14%
Max Revenue beat(4)4.26%
Revenue beat(8)8
Avg Revenue beat(8)2.17%
Revenue beat(12)12
Avg Revenue beat(12)1.73%
Revenue beat(16)13
Avg Revenue beat(16)0.18%
PT rev (1m)-7.64%
PT rev (3m)-20.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-46.39%
EPS NY rev (1m)-3.7%
EPS NY rev (3m)-18.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.16%
Revenue NY rev (1m)0.23%
Revenue NY rev (3m)1.49%
Valuation
Industry RankSector Rank
PE 3.32
Fwd PE 6.17
P/S 0.06
P/FCF N/A
P/OCF 8.1
P/B 0.79
P/tB N/A
EV/EBITDA 2.13
EPS(TTM)2.88
EY30.16%
EPS(NY)1.55
Fwd EY16.21%
FCF(TTM)-0.42
FCFYN/A
OCF(TTM)1.18
OCFY12.34%
SpS171
BVpS12.1
TBVpS-20.89
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -10.66%
ROE -82.69%
ROCE 7.51%
ROIC 5.93%
ROICexc 6.3%
ROICexgc 14.27%
OM 2.75%
PM (TTM) N/A
GM 17.96%
FCFM N/A
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%
ROICexc(3y)4.13%
ROICexc(5y)4.8%
ROICexgc(3y)9.14%
ROICexgc(5y)9.39%
ROCE(3y)5.04%
ROCE(5y)5.96%
ROICexcg growth 3Y-3.22%
ROICexcg growth 5Y-21.91%
ROICexc growth 3Y-13.35%
ROICexc growth 5Y-18.88%
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%
F-Score5
Asset Turnover1.82
Health
Industry RankSector Rank
Debt/Equity 0.86
Debt/FCF N/A
Debt/EBITDA 1.37
Cap/Depr 56.16%
Cap/Sales 0.94%
Interest Coverage 7.03
Cash Conversion 15.61%
Profit Quality N/A
Current Ratio 0.68
Quick Ratio 0.37
Altman-Z 2.33
F-Score5
WACC6.79%
ROIC/WACC0.87
Cap/Depr(3y)79.03%
Cap/Depr(5y)75.66%
Cap/Sales(3y)1.25%
Cap/Sales(5y)1.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-27.82%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-41.79%
EPS Next Y-46.26%
EPS Next 2Y-28.07%
EPS Next 3Y-16.78%
EPS Next 5Y-1.27%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%6%
Revenue Next Year2.54%
Revenue Next 2Y2.07%
Revenue Next 3Y1.88%
Revenue Next 5Y1.63%
EBIT growth 1Y76.88%
EBIT growth 3Y-17.02%
EBIT growth 5Y-16.16%
EBIT Next Year37.76%
EBIT Next 3Y11.56%
EBIT Next 5Y27.82%
FCF growth 1Y-355.63%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-54.94%
OCF growth 3Y-43.2%
OCF growth 5Y-28.88%