Walgreens: No Catalysts To Drive A Turnaround (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• In addition to weak consumer behavior and retail pharmacy industry headwinds, app downloads data suggests Walgreens is lagging vs. competition such as CVS.
• WBA has missed on margin expectations for multiple quarters now, and these pressures are expected to continue due to a tough pricing environment.
• Despite trough discount valuations vs. comps, WBA stock is in a value trap as the stock falls primarily due to earnings downgrades in the absence of catalysts.
• It's not worth fighting a clearly bearish trend on the 12-monthly, 4-monthly, monthly and weekly charts.
• A turnaround is unlikely, but even if it occurs, it needs multiple quarters and there are balance sheet and dividend cut risks.

Read the full article here.