Will Walgreens Start The New Year Off Strong?

When Walgreens Boots Alliance Inc (NASDAQ: WBA) releases its first-quarter fiscal report on Thursday, Deutsche Bank expects to see a gross profit of about $7.4 million — a marker relatively aligned with consensus but $130,000 shy of 2016’s first-quarter benchmark.

Analyst George Hill predicted that the quarter ending in November 2016 yielded a 4-percent growth in revenue from U.S. stores, even as international figures fell an estimated 12 percent and pharmaceutical sales 4 percent relative to their 2016 time frames.

Hill also estimated an EPS report of $1.08, which is 1 cent below consensus.

Rating And Justification

Deutsche Bank reiterated a Buy rating on company shares despite negative public sentiment registered against the retail pharmacy industry. The firm acknowledged a CVS Health Corp (NYSE: CVS) earnings shortfall and a potential price battle between Walgreens and CVS for network contracts as turn-offs for investors.

Company Call Expectations

Walgreens is hosting a call on Thursday regarding its first-quarter results and is expected to address questions regarding drug pricing, reimbursement pressure, payer strategies and the deal between Rite Aid Corporation (NYSE: RAD) and Fred’s, Inc. (NASDAQ: FRED).

Company shares rested around $83.20 on Wednesday at time of writing — about $4.80 shy of Deutsche Bank’s $88 price target.

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