Walgreens Boots Alliance, Inc. (NASDAQ:WBA) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

The investors in Walgreens Boots Alliance, Inc.'s (NASDAQ:WBA) will be rubbing their hands together with glee today, after the share price leapt 24% to US$11.07 in the week following its annual results. It was a pretty bad result overall; while revenues were in line with expectations at US$148b, statutory losses exploded to US$10.01 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Walgreens Boots Alliance

Following last week's earnings report, Walgreens Boots Alliance's 14 analysts are forecasting 2025 revenues to be US$148.4b, approximately in line with the last 12 months. Walgreens Boots Alliance is also expected to turn profitable, with statutory earnings of US$0.02 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$147.2b and earnings per share (EPS) of US$0.52 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The consensus price target held steady at US$11.17, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Walgreens Boots Alliance analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$7.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Walgreens Boots Alliance's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2025 being well below the historical 3.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Walgreens Boots Alliance is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Walgreens Boots Alliance analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Walgreens Boots Alliance you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.