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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Walgreens Boots Alliance, Inc. (XNAS:WBA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WBA
Name:
WALGREENS BOOTS ALLIANCE, INC. (XNAS:WBA)
Sector:
645.00M
Industry:
Pharmaceutical Retailers
CEO:
Mr. Stefano Pessina
Total Employees:
202,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WALGREENS BOOTS ALLIANCE, INC.(WBA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PHARMACEUTICAL RETAILERS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
35.27
One Month Price Target:
$35.39
Six Month Price Target :
$36.
Likely Price in One Year's Time:
Ticker:
$36.74
Likely Trading Range Today Under (Normal Volatility)
$35.12
Price Upper limit ($) :
$35.39
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$33.57
This week:
$31.48
This month :
$27.69
Other Primary facts
Market Cap:
30.53B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
864.26M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.6%
-10.96%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$43.15
$39.60
$27.39
$30.94
Medium risk (<10%) entry points
Buy Call
Sell Call
$38.45
Buy Put:
Sell Put:
$37.69
$32.08
$32.85
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WBA
Sharpe Ratio:
-2.34%
Comparison:
WBA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is 490.04% higher than the industry
& is -202.87% lower than the market/S&P 500 average
Average Returns/Yield of
WBA
Daily returns:
-0.05%
Weekly returns:
-0.23%
Monthly returns:
-0.91%
Yearly returns:
3.83%
Comparison of returns:
Average annual returns/yield (last 3 years) is -385.49% below industry average
Classification:
WBA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.58
Statistical test of Returns:
WBA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.32%
Weekly Volatility:
5.18%
Monthly Volatility:
10.37%
Yearly Volatility:
35.92%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.19%
Volatility in last five trading days has been -48.76% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.81%
Weekly VaR:
-10.75%
Monthly VaR:
-21.50%
How Much Can the price of
WBA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-74.47%
This translates to price declining to:
$28.38
This translates to price declining to:
$9.00
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
WBA is a 51.73% riskier investment compared to the market/S&P 500 & is 29.99% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -31.21% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WBA
Beta in relation to market/S&P 500--0.62
Expected beta in 1 year's time:
0.648
Expected beta in 3 year's time:
0.916
Unlevered (debt free) Beta:
0.312
Beta in relation to Nasdaq (XNAS):
0.525
Beta in relation to all global stocks::
0.538
Beta Comparison & Analysis
Beta of competitors/peers::
0.889
Beta is -30.36% lower than peers
Average Industry Beta:
0.605
Beta is 2.30% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
29.94%
Sustainable growth rate is 0.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.183
Alpha is 427.99% above industry average alpha yield
Alpha is -1166% below the market average
Analysis of Cost of Capital of
WBA
Equity cost of capital:
0.074
Equity cost of capital is 1.31% above industry mean WACC
Unlevered (without debt) cost of capital:
3.73%
Before-tax cost of debt:
1.00%
After-tax cost of debt:
0.79%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.79%
WACC is 0.00% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$155.64
Revenue growth rate per share of (3Y):
1
Annual revenue growth rate is 2.98% above the industry average
EPS:
$6.20
Expected Annual growth rate of EPS (3Y):
18.84%
Expected future EPS growth rate is 1534.22% higher than the Pharmaceutical Retailers industry
Free cash flow (FCF) per share:
$3.66
Balance sheet equity growth per share: 6.55%
Equity growth rate per share is -65.75% lower than the industry
Debt per share
$38.53
EBITDA per share
$10.48
Valuation Analysis Today of
WBA
P/E Ratio:
5.98
P/E Ratio of Competitors/Peers:
49.31
P/E ratio is -87.87% lower than main peers & is -58.49% lower than the industry
Stock price/value with industry average P/E ratio: $89.37
WBA is -60.54% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $78.16
Present value of the expected future dividends only: $27.50
P/S (Price to Sales ratio):
0.23
Price to sales ratio is -79.43% below the industry mean
P/B (Price to book value ratio):
1
Price to free cash flow: 9.64
-
Net income growth rate (3Y):
-42.02%
Net income growth rate is 43.01% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 7.68%
Dividend yeild: 5.41%
Previous Dividend: $0.48
Previous adjusted dividend: $0.48
Previous Dividend: $1.91
Expected next dividend best case: $0.48
Expected next dividend worst case: $0.47
Average dividend payment (long-term): $0.47
Average dividend increase/decrease (growth rate) % per period: 0.42%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-19--$0.48
2021-11-12--$0.48
2021-05-20--$0.47
2022-02-17--$0.48
2021-08-19--$0.48
2021-02-18--$0.47
Dividend growth rate is -143.69% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
126.80%
Net debt to equity ratio:
129.76%
Debt to assets ratio:
34.51%
Net debt to assets ratio:
35.31%
Debt-to-asset ratio is -18.48% below industry average
Ability to repay debt:
Interest coverage ratio:
23.71
Interest coverage ratio is 348.40% more than industry average
Looking forward:
Debt growth rate:
83.80%
Annual debt growth is 100% higher than industry average debt growth rate
Debt repayment rate in last quarter: 11.77%
Analysis of Key Statistics
Correlation of price movement with the market:
0.525
Statistical significance of correlation:
WBA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.374
Stock price is 40.46% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.374
Correlation of price movement with Nasdaq (^IXIC):
0.037
Covariance of price movement with the market:
0.05
Kurtosis
4.425
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.019
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WBA
Gross Profit Margin Ratio:
87%
Operating Profit Margin Ratio:
2.32%
Operating profit margin is -67.86% lower than the industry
Net Profit Margin Ratio:
87%
Effective Tax Rate:
22.57%
Effective tax rate is 18.16% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.48%
Return on equity (ROE) is -21.45% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.57%
Return on assets (ROA) is -49.97% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
0.83
Current ratio is -73.50% below industry average
Cash Conversion Cycle (days):
-18.7
Cash conversion cycle is -145.16% below industry average
The remaining useful life of property plant & equipment is: 7.3 years
Stock based compensation to net income ratio:
0.65%
In-depth Efficiency Analysis
Revenue generated per employee:
665.9K
Each employee generates -32% less revenue than industry average revenue per employee
EBITDA generated per employee:
44.8K
Each employee generates -52% less EBITDA than industry average revenue per employee
Profit generated per employee:
26.6K
Each employee generates -58% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.2K
Each employee generates -710% less free cash flow than industry average revenue per employee
Assets/Capital per employee
377.2K
Each employee generates -710% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WBA
IDEXX LABORATORIES, INC. (XNAS:IDXX)
DEXCOM, INC. (XNAS:DXCM)
ALIGN TECHNOLOGY, INC. (XNAS:ALGN)
ALXN
VERTEX PHARMACEUTICALS INCORPORATED (XNAS:VRTX)
ILLUMINA, INC. (XNAS:ILMN)
BIOGEN INC. (XNAS:BIIB)
REGENERON PHARMACEUTICALS, INC. (XNAS:REGN)
CERNER CORPORATION (XNAS:CERN)
Current Analyst Ratings
Strong buy�21%
Buy�42%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
5/31/22
Revenue:
134.52B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
105.16B
29.36B
-
-
26.63B
-
-
26.63B
-
382.00M
2.02B
9.06B
3.12B
5.38B
5.65B
1.28B
5.38B
Statement of Cash Flow
Date:
Period:
500.00M
Differed Income Tax :
164.00M
Stock Based Compensation :
35.00M
Change in Working Capital :
- 558000.00K
Accounts Receivables:
- 127000.00K
Other Working Capital:
43.00M
Other Non-Cash Items:
- 2622000.00K
Net Cash Provided by Operating Activities:
1.10B
Investments in PP&E:
- 454000.00K
Net Acquisitions:
- 1800000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
11/30/21
2022
Q1
4.14B
-
4.14B
5.96B
9.48B
744.00M
20.31B
34.12B
21.52B
12.77B
6.37B
-
1.41B
76.19B
152.39B
96.51B
12.45B
4.91B
110.00M
-
7.08B
24.45B
33.30B
6.21B
41.48B
-
65.93B
12.00M
38.29B
- 2301000.0K
- 9734000.00K
November 30, 2021 at 12:00:00 AM
131.78B
26.26B
92.19B
-
38.22B
34.1B
-
296.00M
- 1958000.00K
- 4444000.00K
-
- 154000.00K
- 413000.00K
8.89B
3.88B
- 20000.00K
3.00B
4.27B
1.27B
1.10B
- 454000.00K
645.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
WBA
2023
2024
2025
2026
2027
$36.92
$130.00
$135.40
$141.03
$146.90