Bulls Rally Around Walgreen Company (WAG) Ahead of Earnings

Walgreen Company is scheduled to unveil its fiscal 1Q earnings report tomorrow morning

by Karee Venema

Published on Dec 22, 2014 at 3:10 PM
Updated on Apr 20, 2015 at 5:32 PM

Walgreen Company (NYSE:WAG) is slated to take its turn in the earnings confessional ahead of tomorrow's open, with Wall Street calling for a fiscal first-quarter profit of 75 cents for the drugstore chain. Over the past four quarters, the stock has averaged a single-session post-earnings gain of 1.2%, which may be why options traders have shown a slight bullish bias in the months leading up to tomorrow's scheduled event.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WAG's 50-day call/put volume ratio of 1.95 ranks in the 60th percentile of its annual range. Echoing this call-skewed bias is WAG's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.22, which indicates that near-the-money call open interest outweighs put open interest by a roughly 5-to-1 ratio among options slated to expire in three months or less.

This upbeat stance toward WAG is witnessed elsewhere on the Street, as well. Short interest, for example, accounts for a low 1.2% of the stock's available float, and would take less than three sessions to cover, at average daily trading levels. Plus, 60% of covering analysts maintain a "buy" or better rating toward the equity, with not a single "sell" to be found.

On the charts, Walgreen Company (NYSE:WAG) has tacked on an impressive 28.6% year-to-date. More recently, the stock shot through previous resistance in the $69-to-$70 region earlier this month on news of a CEO switch, and was last seen lingering near $73.86.

Daily Chart of WAG Since January 2014

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