Walgreens Boots Alliance Inc

Walgreens Boots Alliance, Inc. (NASDAQ: WBA) is an integrated healthcare, pharmacy and retailing company. The Company operates through three segments: U.S. Retail Pharmacy, International, and U.S. Healthcare.

Recent Financial and Business Updates:

• In the third quarter, WBA reported earnings per share (EPS) of USD 0.14, representing a decrease of USD 0.20 compared to the same quarter last year. However, when adjusted, the EPS increased by 3.3 percent to USD 1.00. On a constant currency basis, the adjusted EPS increased by 3.6 percent, despite a significant 19.5 percent negative impact from lower COVID-19 vaccine and testing volumes.
• Sales for the quarter showed strong growth, increasing by 8.6 percent year-over-year to USD 35.4 billion, and up 8.9 percent on a constant currency basis.
• During the quarter and in June, WBA realized approximately USD 1.9 billion in total proceeds from the monetization of a portion of its holdings in AmerisourceBergen, primarily through a variable prepaid forward structure. Additionally, the company sold its remaining shares of Option Care Health.
• Furthermore, WBA completed the full acquisition of CareCentrix on March 31, 2023, for an approximate cost of USD 380 million. This acquisition represents a strategic move to enhance the company's healthcare offerings and expand its portfolio of services. Overall, these financial highlights and recent equity sales reflect WBA's ongoing efforts to navigate the challenges of the COVID-19 pandemic while pursuing growth opportunities in the healthcare sector.

Technical Observation (on the daily chart)

The price of WBA stock has shown a consistent downward trend since making its 52-week high on December 13, 2022, with a correction of approximately 32.56%. Currently, the stock is near an important support of USD 25.00-USD 26.00, from where price has taken support in the past. A breakout in downward direction from this range would likely initiate a new short-term trend in the down direction with targets of USD 20.00-USD 22.00. The RSI (14 period) momentum indicator is at a value of 33.04, taking support from 30 levels, with expectations of some consolidation or a short-term upward momentum. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.­­­

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Walgreens Boots Alliance, Inc. (NASDAQ: WBA) at the current price of USD 28.54 as of June 30, 2023, at 10:40 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 30, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.