Walgreens Boots Alliance (NASDAQ:WBA) reported disappointing Q4 and FY2023 earnings on Thursday, along with a bleak forecast for 2024. Yet, the company's shares increased by 1.1% in premarket trading following the announcement of Tim Wentworth's appointment as CEO.
The company's FY2023 earnings were $3.98 per share, Q4 earnings were 67 cents per share, and sales amounted to $35.4 billion. The 2024 earnings guidance was lower than expected, ranging between $3.20 to $3.50 per share. Amid these figures, Walgreens, which owns Duane Reade and Boots stores, continues to maintain a high dividend yield of 8.4%. This is in line with the InvestingPro Tips which highlight that the company has a high shareholder yield and has consistently paid significant dividends to its shareholders for 53 consecutive years.
However, the company is also grappling with challenges in its core U.S. pharmacy business and heavy investment in an unprofitable primary and urgent care chain. According to InvestingPro, Walgreens operates with a significant debt burden and its short-term obligations exceed its liquid assets. Furthermore, four analysts have revised their earnings downwards for the upcoming period, indicating potential headwinds.
Analysts Ann Hynes and Lisa Gill adjusted their target prices for Walgreens' stock in light of the earnings report and forecast. Over the last five years, Walgreens' shares have dropped 70.3%. As a result, Raymond James analyst John Ransom recommended that the company end its retail store leaseback strategy, reconsider its dividend, and slow down the expansion of its new primary care chain.
The financial performance comes at a time of leadership change for Walgreens. The company is preparing for the arrival of Tim Wentworth, who previously led divisions at Cigna (NYSE:CI) and Express Scripts (NASDAQ:ESRX), as its new CEO. Additionally, Walgreens is expected to replace its current interim chief financial officer soon.
The potential impact of these leadership changes on Walgreens' financial performance remains uncertain. It's yet to be seen how these changes will affect the company's strategies and financial future. According to InvestingPro's real-time metrics, Walgreens has a market cap of 20.47B USD and a negative P/E ratio of -5.89. The company's revenue for LTM2023.Q3 was 136.11B USD with a growth rate of 1.18%. These figures, coupled with the upcoming leadership changes, will be crucial in shaping the company's financial trajectory.
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