Walgreens Boots Alliance stock forecast after receiving an offer for UK subsidiary

By: Motiur Rahman
Motiur Rahman
Md Motiur is a Financial Analyst at Invezz covering the North American, European and Asian stock markets. He has… read more.
on Jan 3, 2022
  • Walgreens Boots Alliance shares surged 1.14% on Monday morning after receiving an offer for Boots UK.
  • The company will announce its fiscal first-quarter 2022 results on Thursday, the 6th of January.
  • Analysts expect earnings of about $1.32 per share from a top line of $32.7 billion.

On Monday, Walgreens Boots Alliance Inc. (NASDAQ:WBA) shares surged more than 1% after receiving an offer of around $8.1 billion for Boots UK from private equity firm Bain Capital.

Sky News broke the news early last month that the US-based drugstore was exploring options to sell Boots UK. 

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This is not the first piece of divestiture Walgreens is undertaking. Last year, the company sold its healthcare business to AmerisourceBergen Corp (NYSE:ABC) for $6.5 billion.

Walgreens reports its fiscal first-quarter, 2022 results on the 6th of January and analysts are optimistic after boosting its EPS forecast ten times in the last three months, with only one downward revision to note.

Walgreens looks undervalued

From an investment perspective, Walgreen shares trade at an attractive forward P/E ratio of 10.20, making the stock an exciting option for value investors. Furthermore, analysts are optimistic about its earnings potential.

They expect the company to report an EPS of about $1.32 from a revenue of $32.7 billion in the upcoming quarterly report, after 10 upward revisions in the last three months.

Source – TradingView

Technically, the stock seems to be trading within a sharply ascending channel formation in the intraday chart. As a result, Walgreens shares have surged into overbought conditions.

However, given the company’s compelling valuation and optimism ahead of its FQ1 results, investors could target profits at about $53.90, or higher at $55.13, while $51.51 and $50.28 are crucial support zones.

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