Walgreens Stock Hits 27-Year Low After Massive Earnings Miss

Walgreens Boots Alliance ( WBA ) stock is down nearly 25% Thursday to trade at a 27-year low after the pharmacy retail chain missed earnings expectations for its fiscal third quarter and cut its outlook for the full year.

In the three months ended May 31 , Walgreens' revenue increased 2.6% year-over-year to $36.4 billion, which included a 2.3% year-over-year rise in its domestic retail pharmacy segment to $28.5 billion. The company said earnings per share (EPS) slumped 36.6% to 63 cents from the year-ago period.

"We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins," Walgreens CEO Tim Wentworth said in a statement. "Our results and outlook reflect these headwinds, despite solid performance in both our International and U.S. Healthcare segments."

The results were mixed compared with analysts' expectations. According to Yahoo Finance , Wall Street was anticipating revenue of $35.9 billion and earnings of 68 cents per share.

As a result of "challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment," Walgreens cut its full-year earnings guidance. The company now anticipates EPS in the range of $2.80 to $2.95, down from its previous guidance of a range of $3.20 to $3.35.

Is Walgreens stock a buy, sell or hold?

It's been a rough stretch for the former Dow Jones stock , which was replaced in the 30-stock index by Amazon ( AMZN ) earlier this year. Indeed, shares were down nearly 40% heading into today's session, so it's unsurprising that Wall Street is on the sidelines when it comes to WBA.

According to S&P Global Market Intelligence , the average analyst target price for WBA stock is $21.52, representing implied upside of more than 82% to current levels. Despite the significant implied upside, the consensus recommendation is a Hold.

Given the weak quarter and reduced full-year outlook, it would not be a surprise to see analysts downwardly revise their price targets on WBA stock in the days and weeks ahead.

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