Walgreens (WBA, $38.60) misses Q3 earnings estimate

Walgreens Boots Alliance Inc. reported third quarter earnings that missed analysts' expectations. 

The retail/wholesale pharmacy company’s adjusted earnings for the three months ending in May came in at 83 cents per share, falling short of the Street consensus estimate of $1.18 per share. The EPS was also -43.5% lower from the same period last year.  

Revenues rose +0.1% year-over-year to $34.6 billion, just ahead of analysts' estimates of a $34.35 billion.

Looking ahead, the company projected adjusted earnings in the region of $4.65 per share to $4.75 per share for the year, which  includes a coronavirus impact of between $1.03 and $1.14 per share. 

According to Tickeron, WBA in Downtrend: RSI indicator exits overbought zone

WBA's price could be shifting from an uptrend to a downtrend. Traders may consider selling the ticker or exploring put options. In 21 of 29 cases where WBA's RSI Indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 72%.

Current price $38.50 is below $41.19 the lowest support line found by A.I. Throughout the month of 06/05/20 - 07/08/20, the price experienced a -7% Downtrend. During the week of 06/30/20 - 07/08/20, the stock fell -0.24%.

Technical Analysis (Indicators)

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on July 06, 2020. Traders may consider selling the ticker, shorting the ticker, or exploring put options. In 55 of 86 cases where WBA's Momentum Indicator fell below the 0 level, its price fell further within the subsequent month. The odds of a continued Downtrend are 64%.

The Moving Average Convergence Divergence (MACD) crossed below the signal line. In 36 of 52 cases where WBA's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 69%.

The 10-day Moving Average for this ticker crossed below its 50-day Moving Average on July 07, 2020. This can be construed as a sell signal, indicating that the trend is shifting lower. In 9 of 16 cases where WBA's 10-day Moving Average crossed below its 50-day Moving Average, its price fell further within the subsequent month. The odds of a continued Downtrend are 56%.

The higher Bollinger Band was broken -- a price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker, or exploring put options. In 21 of 35 cases where WBA's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued Downtrend are 60%.

Bullish Trend Analysis

The Stochastic Indicator suggests the ticker price trend may be in a reversal from a Downtrend to an Uptrend. 31 of 61 cases where WBA's Stochastic Indicator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued Uptrend are 51%.

The price moved above its 50-day Moving Average, which indicates a change from a Downtrend to an Uptrend. In 27 of 45 similar backtested cases where WBA's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 60%.

The Aroon Indicator entered an Uptrend today. In 61 of 181 similar cases where WBA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 34%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 61%. During the last month, the daily ratio of advancing to declining volumes was 1.12 to 1.

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 90, placing this stock worse than average.

The Tickeron Price Growth Rating for this company is 59 (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 PE Growth Rating for this company is 45 (best 1 - 100 worst), pointing to consistent 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.

The Tickeron SMR rating for this company is 19 (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 15 (best 1 - 100 worst) indicates that the company is slightly 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 (1.57) is normal, around the industry mean (2.94). P/E Ratio (10.87) is within average values for comparable stocks, (34.67). Projected Growth (PEG Ratio) (0.51) is also within normal values, averaging (0.57). Dividend Yield (3.47) settles around the average of (1.98) among similar stocks. P/S Ratio (0.29) is also within normal values, averaging (0.66).

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.