Walgreens Inventory Stumbles Amid Authorized Challenges, Throwing Chilly Water on Hopes for a Rebound

After a troublesome yr for Walgreens (WBA) traders in 2024, shares might have appeared poised to begin 2025 on robust be aware after the corporate’s first-quarter outcomes topped expectations.

Nonetheless, even earlier than a brand new lawsuit from the Division of Justice despatched shares sharply decrease Tuesday, analysts remained unsure in regards to the inventory.

Among the many eight analysts overlaying Walgreens tracked by Seen Alpha, 4 issued “maintain” scores for the inventory, three rated it “promote,” and only one gave it a “purchase” score, with a mean value goal of $10.81, just under the extent Walgreens shares closed at Tuesday after tumbling over 9% to $11.37.

Jefferies and Deutsche Financial institution analysts stored “maintain” scores and voiced warning earlier this month within the wake of the corporate’s better-than-expected outcomes. Jefferies analysts stated that whereas the outcomes had been encouraging, they “do not see it as an ‘all clear’ simply but,” including they “wish to see extra optimistic datapoints” earlier than projecting a bigger turnaround.

The analysts warned that regardless of the corporate’s cost-cutting efforts like closing a whole bunch of “underperforming” shops, the corporate’s retail pharmacy enterprise is more likely to “stay challenged.”

The brand new go well with from the DOJ provides a layer of regulatory threat to Walgreens’ already-challenged retail setting, as its CEO acknowledged in its earnings name earlier this month that some methods like locking up merchandise didn’t work in addition to anticipated.