Walgreens Boots Alliance Inc (WBA)

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Walgreens Wants More

Of the many companies that reported today, Walgreens had a shine unlike any other. The drugstore company bested analyst estimates.

Walgreens reported EPS of $1.17 adjusted (vs. $1.02 expected) and revenue of $34.26 billion (vs. $33.3 billion.) Revenue in Q3 2020 was $30.37 billion, showing just how beefy the company’s revenue growth has been.

Walgreens’ net income rose over $627 million in the quarter, nearly doubling YoY. Walgreens CEO Roz Brewer shared that the COVID vaccine campaign had a “halo effect” on business in stores — customers with vaccine appointments bought products while waiting for their shots. Brewer intends for Walgreens to continue offering vaccines in the future.

But impressive numbers weren’t all that Walgreens had to offer for investors. The company wants the public to know that it’s done being “just a pharmacy.” The company is starting a new division called Walgreens Health, which will allow many of the brand’s 9,000 stores to offer doctor appointments, medical tests, and the like.

The company also acquired stakes in “several healthcare companies,” including a primary care company called VillageMD, a home healthcare company called CareCentrix, and a specialty pharmacy company called Shields Health.

All the excitement feels deeply reminiscent of CVS Health, which acquired insurance company Aetna in 2018. CVS also owns a pharmacy and clinic biz. You can call Walgreens a copycat, but investors really like this end-to-end model.

$WBA caught a 7.4% rip today on the good news.