Walgreens Boots Alliance Prepares for Earnings

The equity has a split history of post-earnings reactions

Assistant Editor
Dec 27, 2021 at 1:17 PM
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Blue-chip name Walgreens Boots Alliance Inc (NASDAQ:WBA) is gearing up for its fiscal first-quarter earnings, which is due out before the open on Thursday, Jan. 6. Below, we will explore the equity's technical performance and previous post-earnings activity. 

On the charts, Walgreens Boots Alliance stock has had a tumultuous run in 2021. Recently, the equity breeched familiar support at the 320-day moving average, falling near annual lows, though its back trading above the trendline. The last few months have seen the $51 area act as a ceiling on multiple occasions, which is the case today as he stock is flat, last up 0.6% to trade at $50.78. Year-over-year, WBA remains up 28.1%. 

WBA Chart Dec 27

The security has a mixed history of post-earnings reactions. Over the past two years, WBA finished four of these eight next-day sessions higher, including a 7.4% pop in October. Options traders are pricing in a 5.9% swing for the security this time around, which is nearly in line with the 6% move Walgreens Boots Alliance stock averaged after its last eight reports, regardless of direction. 

With more than a week left before the event, call traders are piling on the equity. So far today, 21,000 calls have crossed the tape, which is double the intraday average and 10 times the amount of puts traded. The most in demand contract by far is the January 2022 52.50 call. Meanwhile, new positions are being opened at the popular weekly 1/7 54-strike call, which indicates traders see potential upside following the company's earnings.

A broader look shows calls have been the go-to choice for some time. This is according to Walgreens Boots Alliance stock's 50-day call/put volume ratio of 4.46 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 74% of readings in its annual range.  

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