Walgreens Boots Alliance Inc. (NASDAQ:WBA) is facing tumultuous times as it grapples with a challenging turnaround, leading to a drastic decline in its stock value, marking its worst performance in over five years.
The company's shares plummeted by 18% in April, nearing a 26-year low, following a downward revision of its outlook.
This revision was accompanied by concerns over decreased consumer spending and the revelation of a substantial unpaid tax liability amounting to $2.7 billion, adding to the woes of the beleaguered drugstore chain.
In March, Walgreens Boots Alliance reported second-quarter fiscal year 2024 earnings and narrowed the fiscal year 2024 adjusted EPS guidance to $3.20-$3.35 versus prior guidance of $3.20-$3.50 and consensus of $3.24.
Over the past eight years, Bloomberg highlighted that Walgreens has witnessed consistent losses in its stock value, primarily due to its struggle with high debt stemming from an aggressive acquisition spree.
Despite this downturn, the company remains optimistic about its prospects, embarking on a strategic review of its operations to regain investor confidence and reignite growth.
Key management changes, including the departure of former CEO Roz Brewer, have further unsettled investors, with the stock shedding nearly half of its value during her tenure.
The company is now exploring potential separations, including discussions to split from its UK pharmacy chain, Boots, and assessing options for its specialty pharmacy business, Shields Health Solutions.
However, Wall Street's sentiment toward Walgreens remains cautious, with analysts adopting a wait-and-see approach, the Bloomberg report added.
While some anticipate positive outcomes from the strategic review, others express concerns about potential asset monetization, fearing the loss of crucial components of the business or selling assets at a discount.
Amidst these challenges, the broader landscape of the pharmaceutical market also faces turbulence, with Walmart Inc (NYSE:WMT) announcing the closure of its primary-care clinics, reflecting the difficulties companies face expanding into the sector.
Despite the prevailing skepticism, citing some analysts, Bloomberg highlights potential avenues for Walgreens to improve its fortunes.
Price Action: WBA shares are down 1.97% at $17.38 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
