WBA is also facing reimbursement pressure from insurers that will weigh on pharmacy gross margins, Ransom adds.Īt the same time, management's earnings guidance is tepid.
Walgreen is shopping its Boots international drugstore chain to buyout firms, according to multiple reports. Raymond James analyst John Ransom rates WBA at Market Perform (the equivalent of Hold), citing difficult comparisons against COVID-19-related results, the ending of tobacco sales and the sale of its Boots business. Sign up for Kiplinger's FREE Closing Bell e-letter: Our daily look at the stock market's most important headlines, and what moves investors should make. Sluggish revenue growth and stagnant margins have been familiar drags on past results, and WBA faces additional headwinds going forward into 2023. Indeed, of the 20 analysts following the pharmacy chain, 18 rate shares at Hold, one says Sell and one calls it a Strong Sell.
The Street hasn't budged from its consensus Hold recommendation on Walgreens Boots Alliance ( WBA (opens in new tab), $44.23) for two years, and not a single analyst covering the stock expects it to outperform the broader market over the next 12 months or so.
However, with 3M shares having declined as much as 21% for the year-to-date through March 11, they're "much closer to fair value in a high inflation and energy cost environment," the analyst says.
"Without much pricing power, we expect 3M to see material margin compression in 2022 amid high inflation, especially with the manufacturer being a large consumer of oil, natural gas, and refined oil and gas products," says CFRA Research analyst Colin Scarola. Snarled supply chains, input cost inflation and the company's limited ability to raise its prices have only added to the Street's collective gloom.īe that as it may, the materials stock's terrible start to 2022 did prompt at least one analyst to lift his recommendation on MMM in early March – albeit to Hold from Sell. Sluggish-to-stagnant revenue, margin and earnings growth has made MMM stock a long-time market laggard. Sadly, that helped the industrial conglomerate extend its unenviable reign as Wall Street's least favorite Dow stock.
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