Squeezed by the rise of online pharmacies, falling reimbursement rates for prescription drugs, and giants like Amazon eating into their general retail sales, Walgreens investors have had a disappointing year — and nowhere does that show up more clearly than on the ticker tape.
Indeed, Walgreens (WBA) stock has now shed 63%+ of its value this year, more than any other in the S&P 500 Index, per data from FactSet. Some shareholders are even suing the company and its management, alleging that they breached their fiduciary duty by inflating Walgreens’ performance projections.
An Rx for Walgreens
So, how does Walgreens turn its ship around? In recent years the company was betting on getting closer to patients, spending more than $5 billion to acquire a majority stake in VillageMD in 2021, as part of an effort to turn its stores into primary-care destinations, as well as just being prescription fillers.
That didn’t really work. Indeed, in June Walgreens announced that it would be cutting its stake in VilageMD, after the company booked an eye-watering $5.8 billion write-down of its value earlier this year. It also said it would begin to dramatically slim its store portfolio, with as many as one-quarter of its 8,600 stores set to close.
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