With the Rite Aid deal in jeopardy, let us take a look and see how their most recent quarterly earnings went and begin establishing a fundamental opinion. These numbers are representing the first quarter of 2017. GAAP diluted net earnings per share decreased 4.0 percent from the year-ago quarter, to $0.97. Sales decreased 1.8 percent to $28.5 billion, increased 1.1 percent on a constant currency basis. Overall, the numbers to be appear average, but what will really swing this one way or another is the Rite Aid deal.
Let us see if price is reacting to the news of the potential issue. If you look, price has been range bound for quite sometime, and this could be in anticipation of the news. However, this may not be the best place to be for new investors and price may have a dramatic swing in the next few days depending on if the deal gets approved. My recommendation is to wait for this deal to settle one way or the other and then look at potentially investing.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Walgreens Boots income statement, its balance sheet, and the statement of cash flows. Potential Walgreens Boots investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Walgreens Boots investors may use each financial statement separately, they are all related. The changes in Walgreens Boots's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Walgreens Boots's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Walgreens Boots
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Walgreens Boots performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Walgreens Boots shares is the value that is considered the true value of the share. If
the intrinsic value of Walgreens is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Walgreens Boots. Please read more on our
fundamental analysis page.
How effective is Walgreens Boots in utilizing its assets?
Walgreens Boots Alliance reports assets on its Balance Sheet. It represents the amount of Walgreens resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Walgreens Boots aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Consumer Staples Distribution & Retail space. To get a better handle on how balance sheet or income statements item affect Walgreens volatility, please check the breakdown of all its
fundamentals.
Are Walgreens Boots Earnings Expected to grow?
The
future earnings power of Walgreens Boots involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Walgreens Boots factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Walgreens Boots
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Walgreens
expected earnings.
And What about dividends?
A dividend is the distribution of a portion of Walgreens Boots earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Walgreens Boots dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Walgreens one year expected dividend income is about USD1.2 per share.
At present, Walgreens Boots'
Dividends Paid is projected to increase significantly based on the last few years of reporting. The current year's
Dividend Yield is expected to grow to 0.07, whereas
Dividend Payout Ratio is projected to grow to
(0.46).
Investing in dividend-paying stocks, such as Walgreens Boots Alliance is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Walgreens Boots must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Walgreens Boots. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
Walgreens Boots Gross Profit
Walgreens Boots Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Walgreens Boots previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Walgreens Boots Gross Profit growth over the last 10 years. Please check Walgreens Boots'
gross profit and other
fundamental indicators for more details.
Breaking down Walgreens Boots Further
Risks
You can take a look at the most recent 10-K filing for a complete list of risks and details, but here are a few to keep in mind before investing. First off, if you must invest in the next few days, keep in the front of your research the potential that the Rite Aid deal will fail. The stock and company may be able to withstand the fall, but that doesn’t mean your portfolio can. Also, keep in mind that Walgreens is in the retail sector, which means they are subject to large market swings, as well as demand in certain products. If they are unable to meet the needs of the consumer, they will begin shopping at competitor stores.
Conclusion
Right now, the Rite Aid deal is in limbo and may not go through, and for that reason, I would be waiting on the sidelines if you really want to invest in Walgreens. In the mean time, compare the company to others in industry and decide which one is giving the best value right now. If that’s not enough, consult an investing professional and they can certainly point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Walgreens Boots Alliance. Please refer to our
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