Walgreens (WBA, $36.87) beats fiscal Q4 earnings expectations

Walgreens Boots Alliance  reported fourth quarter earnings that exceeded expectations.

The pharmaceutical distribution company’s  adjusted profits for the three months ending in September, came in  at $1.02 per share, falling -28.7% year-over-year, but  six cents above the Street consensus expectation.

 Revenues climbed +2.3% year-over-year to $34.7 billion, edging past analysts' estimates of $34.37 billion.

The company’s comparable U.S. store sales for retail pharmacy business grew +3.6%.

According to Walgreens, adjusted profits for 2021 should grow in the "low single-digit' percentage range, although the first half of the year will be adversely affected by the coronavirus pandemic.

According to Tickeron, Momentum Indicator for WBA turns negative, indicating new downward trend

WBA saw its Momentum Indicator move below the 0 level on October 14, 2020. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 89 similar instances where the indicator turned negative. In 62 of the 89 cases, the stock moved further down in the following days. The odds of a decline are at 70%.

Current price $36.87 is below $36.89 the lowest support line found by A.I. Throughout the month of 09/14/20 - 10/14/20, the price experienced a +2% Uptrend, while the week of 10/07/20 - 10/14/20 shows a -2% Downtrend.

Technical Analysis (Indicators)

Bearish Trend Analysis

The Stochastic Indicator may be shifting from an upward trend to a downward trend. In 34 of 59 cases where WBA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 58%.

WBA moved below its 50-day Moving Average on August 17, 2020 date and that indicates a change from an upward trend to a downward trend.

The 10-day Moving Average for WBA crossed bearishly below the 50-day moving average on August 21, 2020. This indicates that the trend has shifted lower and could be considered a sell signal. In 9 of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 50%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 63%.

WBA broke above its upper Bollinger Band on October 08, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Bullish Trend Analysis

The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where WBA's RSI Indicator exited the oversold zone, 15 of 30 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 50%.

The Moving Average Convergence Divergence (MACD) for WBA just turned positive on September 17, 2020. Looking at past instances where WBA's MACD turned positive, the stock continued to rise in 31 of 49 cases over the following month. The odds of a continued upward trend are 63%.

Following a +3.12% 3-day Advance, the price is estimated to grow further. Considering data from situations where WBA advanced for three days, in 161 of 319 cases, the price rose further within the following month. The odds of a continued upward trend are 50%.

The Aroon Indicator entered an Uptrend today. In 99 of 180 cases where WBA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 55%.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 70%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.36.

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WBA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.

The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating fairly steady price growth. WBA’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is 18 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of 6 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.51) is normal, around the industry mean (2.67). P/E Ratio (44.03) is within average values for comparable stocks, (40.28). Projected Growth (PEG Ratio) (0.51) is also within normal values, averaging (0.72). Dividend Yield (3.47) settles around the average of (1.65) among similar stocks. P/S Ratio (0.27) is also within normal values, averaging (0.67).

The Tickeron PE Growth Rating for this company is 6 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.