While investors were already anticipating a miss and guidance revision for Walgreens Boots Alliance Inc (NASDAQ:WBA)’s third-quarter 2023, the results and revision came in even worse than expectations, UBS analysts wrote in a note to clients.
The company blamed consumer and category conditions, lower COVID-19 contribution, and a more cautious macroeconomic view.
“Furthermore free cash flow generated during the quarter was -$444 million, which was also well below consensus expectations of +$300 million, with no guidance for the year placing some uncertainty around dividend coverage,” they wrote.
Analysts at UBS added that for the year to date period, Walgreens’ free cash flow is up $116 million, which compares unfavorably to the $2.6 billion generated year ago.
As well, they noted that the company’s preliminary fiscal year 2024 earnings per share “looks tough” given its second-half outlook.
The analysts currently have a ‘Neural’ rating on Walgreens stock with a 12-month target price of $35.
Shares of Walgreens rose 1.2% to $28.98 in late-afternoon trading on Wednesday but are down 22% year to date.
Contact Sean at sean@proactiveinvestors.com