Walgreens Stock Pivots Lower Despite Top-Line Beat

WBA has struggled this summer

Assistant Editor
Jul 1, 2021 at 9:43 AM
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Despite pointing up in premarket trading, near the bottom of the Dow this morning sits Walgreens Boots Alliance Inc (NASDAQ: WBA), down 7.1% to trade at $48.71 at last check. This comes even though the blue chip drugstore chain raised its outlook for the year in response to an upbeat fiscal third-quarter earnings report. Walgreens announced adjusted earnings of $1.51 per share -- well above analysts' estimates of $1.17 -- to pair with a revenue beat, which was aided by a rebound in prescriptions volumes.

In addition to the corporate report, the company announced it administered 17 million Covid-19 vaccinations in the third quarter, and projects 28 million vaccinations in 2021, with around 7 million to come in the fourth quarter.

Walgreens stock has struggled on the charts of late, tumbling from its April 6 annual high of $57.05. WBA finished the quarter with a 4.2% deficit, but is still up 32% year-to-date. Despite the modest gains in 2021, analysts are bearish on the equity. Of the 12 in coverage, 10 rate WBA a tepid "hold" or worse.

An unwinding of optimism in the options pits could put pressure on the equity. WBA's Schaeffer's put/call volume ratio (SOIR) of 0.57 stands in the low 16th percentile of its 12-month range, meaning short-term options traders have rarely been more call-biased. 

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