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Walgreens Boots Alliance Inc - Stock Quote WBA

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Morningstar's Walgreens Boots Alliance Inc Stock Analysis

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Walgreens to Settle Florida Opioid Suit for $683 Million

Dylan Finley, CFA Equity Analyst

Analyst Note

| Dylan Finley, CFA |

In a news release issued today, no-moat Walgreens announced that it had reached a $683 million settlement agreement with Florida to resolve outstanding claims against the company's role in distributing and dispensing prescription opioid medications in the state. The net settlement amount is composed of $620 million to be paid over an 18-year period, in addition to $63 million upfront in attorney fees. We expect to publish an updated discounted cash flow model shortly, taking the impact of these cash outflows into account. Because of the long horizon over which the settlement is to be paid, the annualized settlement amount ($34 million/year) should not have a material impact on free cash flow to the firm or impact the company's ability to fund its healthcare services growth initiatives. Therefore, we do not expect a revision to our $48 per share fair value estimate.

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Walgreens Boots Alliance Inc's Company Profile

Business Description

Walgreens Boots Alliance is a leading retail pharmacy chain, with over 13,000 stores in 50 states and 9 countries. Walgreens’ core strategy involves brick-and-mortar retail pharmacy locations in high-traffic areas, with nearly 80% of the U.S. population living within 5 miles of a store. Currently, the company has a leading market share of the domestic prescription drug market at about 20%. In 2021, the company sold off a majority of its Alliance Healthcare wholesale business to AmerisourceBergen for $6.5 billion, doubling down on its core pharmacy efforts and ventures in strategic growth areas in primary care (VillageMD) and digital offerings. The company also has equity stakes in AmerisourceBergen (29%) and Sinopharm Holding Guoda Drugstores (40%).

108 Wilmot Road
Deerfield, IL, 60015
T +1 847 315-3700
Sector Healthcare
Industry Pharmaceutical Retailers
Most Recent Earnings Feb 28, 2022
Fiscal Year End Aug 31, 2021
Stock Type High Yield
Employees 315,000

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