Walgreens Boots Alliance (WBA) is facing significant challenges, leading many analysts to advise investors to reconsider holding the stock despite its previously high dividend yield. The company plans to close approximately 1,200 stores over the next three years, including 500 in 2025, due to increased competition from discount retailers.
Despite recent rallies driven by news of a potential buyout with Sycamore Partners, analysts at Deutsche Bank warn that it may not be enough to salvage the stock. The company’s financial health has become a major concern, with significant debt, unresolved opioid lawsuits, and a tax dispute with the IRS weighing on its bottom line.
Walgreens’ Q1 fiscal 2025 results showed a 7.5% year-over-year sales increase but also reported a loss per share of $0.31, worse than the previous year’s loss. The company has suspended its quarterly cash dividend, citing a need to focus on long-term growth.
Deutsche Bank’s “Sell” rating and lowered price target of $9 reflect their concerns about the buyout plan, which they believe is “incredibly complicated.” With a lukewarm analyst consensus and declining retail performance, Walgreens’ path forward appears uncertain. Prudent investors should carefully reassess their positions in this once-stalwart pharmacy giant.
Source: https://www.barchart.com/story/news/31242213/analysts-are-pounding-the-table-sell-this-high-yield-dividend-stock-now