Walgreens Boots Alliance shares dropped by 12.3% in morning trading after the US Department of Justice accused the company of filling millions of unlawful opioid prescriptions. The DOJ claims that Walgreens ignored major red flags and pressured pharmacists to dispense these medications, then sought reimbursement from federal programs in violation of the False Claims Act.
Despite denying any wrongdoing, the sharp decline suggests investors are uncertain about the impact this legal battle may have on the company. Walgreens shares closed at $11.37, down 9.1% from their previous close.
The stock’s volatility has been evident over the past year, with 18 moves greater than 5%. However, today’s significant drop indicates that this news had a major impact on market perception of the business.
In contrast, Walgreens’ shares gained 26.2% just 11 days ago when the company reported strong fourth-quarter results, beating analyst expectations. The company has continued to expand its footprint while maintaining a lean cost structure, with full-year EPS guidance coming in above expectations.
Over the past year, Walgreens has risen 22.9%, but is still trading 51.4% below its 52-week high of $23.25 from January 2024. This would result in an investment worth $209.58 for someone who initially invested $1,000 five years ago.
As generative AI continues to shape the business landscape, investors are increasingly looking to semiconductor stocks benefiting from this trend. While Nvidia and AMD are near all-time highs, a lesser-known but profitable option may offer better returns.
Source: https://finance.yahoo.com/news/why-walgreens-wba-stock-trading-165703240.html