Pharmacy growth might aid Walgreens to deliver upbeat Q4 results

Walgreens Boots Alliance (WBA) sales from its pharmacy stores are likely on the upward growth for the recently completed fourth-quarter as analysts expect upbeat results for the quarter. The drugstore chain is slated to announce its fourth-quarter financial results on Thursday before the market opens. Ahead of the release, investors are cautious as the stock opened lower on Tuesday and remained grounded.

Analysts, on average, expect the company to earn $1.45 per share compared to $1.31 per share reported in the previous year quarter. Sales are anticipated to increase by 12% to $33.78 billion. Most of the analysts recommended a “strong buy” or “buy” rating on the stock with an average price target of $73.61.

With more than half of Rite Aid (RAD) pharmacies under its hood, Walgreens is securing its position in the healthcare space. This is in the midst of the threat of Amazon (AMZN) entering the pharmacy space that has created immense pressure on other existing players. Walgreens is also facing another pressure from rival CVS Health (CVS) that is due in acquiring Aetna (AET) later this year.

In the third quarter, Walgreens posted a 16% jump in earnings as it brought more patients to its US pharmacies through the recent purchase of Rite Aid stores and through strategic partnership. Sales increased 14% on higher prescription volume from the Rite Aid stores acquisition and from central specialty.

US pharmacy sales grew 19%, and Retail Pharmacy USA increased by 15%. Retail Pharmacy International sales improved 6.6%, and Pharmaceutical Wholesale sales grew 12.6%. The company had lifted the low end of its fiscal year 2018 earnings outlook by five cents.

It is expected that the company will be providing guidance for the fiscal year 2019 and its long-term strategic goals during the earnings call. Walgreens is likely to declare the unchanged $0.44 per share quarterly dividend, and the board is predicted to give more information on the development of the last quarter authorized share repurchase program.

Walgreens Boots Alliance sales jump in third quarter