What's Going On With Walgreens Boots Alliance Stock Wednesday

On Tuesday, Walgreens Boots Alliance Inc WBA lowered its FY23 annual guidance on an appropriately cautious forward view in light of consumer spending uncertainty and a larger-than-expected drop in COVID-19 product sales.

The company sees FY23 adjusted EPS guidance of $4.00-$4.05 from the previous $4.45 - $4.65 (versus the consensus of $4.45).

Q4 is expected to be negatively impacted by a higher effective tax rate, shifting U.S. consumer spending with heightened macro pressures, and a weaker respiratory season.

The end of the COVID emergency in May led to a steep drop in COVID vaccines and testing.

"Similar to other retailers, we've been impacted by the rapid softening of the macro environment and a more cautious and value-driven consumer," Reuters noted, citing Walgreens CEO Rosalind Brewer.

Walgreens' shares closed at $28.64, hitting their lowest in more than 11 years.

"Very few people are getting either rapid tests or the actual PCR nasal swab tests. That...probably has some impact on CVS and Rite Aid," Gabelli Funds portfolio manager Jeff Jonas said.

In its Q3 earnings conference call, the company said Boots would be closing 300 stores in the U.K. and 150 Walgreens branches in the US over the next year as parent company Walgreens Boots Alliance seeks to "optimize" locations. "As you have seen, we are accelerating our portfolio optimization to further simplify the business," the company added.

Deutsche Bank analyst downgraded the Walgreens Boots Alliance stock from Buy to Hold, lowering the price target from $46 to $34.

Bank of America Securities reiterated a Sell rating on Walgreens Boots Alliance.

Price Action: WBA shares are down 0.45% at $28.51 during the premarket session on the last check Wednesday.

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