In This Article:
What Happened?
Shares of pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) jumped 26.2% in the morning session after the company reported impressive fourth-quarter results, which blew past analysts' revenue and EPS expectations. Adding to the positives, full-year EPS guidance came in above expectations. The company continued to expand its footprint while keeping its cost structure lean, and the results indicate that some of these efforts are already paying off. Overall, we think this was a strong quarter.
The shares closed the day at $11.75, up 27.6% from previous close.
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What The Market Is Telling Us
Walgreens’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for Walgreens and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about a month ago when the stock gained 19.9% after The Wall Street Journal reported that the company was in talks to sell itself to private equity firm Sycamore Partners. Most acquisitions close at a premium, raising the possibility that existing investors could exit their positions at a higher price if Walgreens strikes a deal with a buyer.
Walgreens is up 28% since the beginning of the year, but at $11.76 per share, it is still trading 52.3% below its 52-week high of $24.68 from January 2024. Investors who bought $1,000 worth of Walgreens’s shares 5 years ago would now be looking at an investment worth $216.90.
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