Walgreens: Clear Overreaction
Walgreens fell by 8% following disappointing FQ3 results.
The company was hit by higher cleaning costs and weaker U.K. Boots sales.
The stock now offers a 4.8% dividend yield while trading at only 7x normalized EPS estimates.
Walgreens Boots Alliance (NASDAQ:WBA) has too slowly transitioned to the digital realities of the modern retail environment, but the stock drop after FQ3 results was a clear overreaction. The quarterly results weren't as bad as the stock reaction for a stock already down about 20% from the previous highs. My investment thesis is more bullish on the stock following this dip below $40, as Walgreens Boots gets more aggressive with its digital plans and expands into more personalized healthcare services after a slow start.
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