WBA

Walgreens Boots Alliance Inc

Healthcare, Consumer


Presented:11/14/2019
Price:$61.48
Cap:$54.88B
Current Price:$10.42
Cap:$9.00B

Presented

Date11/14/2019
Price$61.48
Market Cap$54.88B
Ent Value$63.47B
P/E Ratio14.42x
Book Value$26.26
Div Yield2.95%
Shares O/S892.54M
Ave Daily Vol5,765,448
Short Int3.51%

Current

Price$10.42
Market Cap$9.00B
Walgreens Boots Alliance, Inc. engages in the provision of drug store services. The company operates through the following segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. The Retail Pharmacy USA segment engages in pharmacy-led health and beauty retail businesses, which sells its products under brand names Walgreens and Duane Reade. The Retail Pharmacy International segment offers retail stores, which sells products of brands No7, Boots Pharmaceuticals, Botanics, Liz Earle, and Soap & Glory. The Pharmaceutical Wholesale segment supplies medicines, other healthcare products and related services to pharmacies, doctors, health centers, and hospitals. The company was founded in 1901 and is headquartered in Deerfield, IL.

Publicly traded companies mentioned herein: AmerisourceBergen Corp (ABC), Amazon Inc (AMZN), KKR & Co Inc (KKR), Walgreens Boot Alliance Inc (WBA)

Highlights

The presenter holds a negative view of the risk/reward profile for Walgreens Boots Alliance Inc (WBA), despite the potential for a KKR go private transaction, citing the unknown outcomes of opioid litigation, and the structural issues that WBA is currently facing. He handicaps the buyout risk at ~$70 per share, against an initial mid-$50 range if the deal doesn’t materialize, followed by a longer term melting ice cube phenomenon. The presenter outlined the potential outcomes of the Ohio opioid trials, noting that the focus of the plaintiffs in litigation has moved from the manufacturers and distributors onto the actual pharmacies. Each of these three “buckets” of defendants would be on the hook for some sort of liability. Any opioid litigation would be a big hurdle to leveraging up WBA and buying them out. 

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Idea Discussion

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