The retail pharmacy business of Walgreens Boots Alliance is on the rise, and comments from the company’s chief executive are convincing Wall Street that a buyout from private equity is unlikely. In this photo, customers are seen shopping at a Walgreens store in El Cerrito, California. (Photo by Justin Sullivan/Getty Images)
Walgreens’ improving retail pharmacy business and reassuring statements from its CEO have instilled confidence in Wall Street that the drugstore chain is not headed for a buyout by private equity firms.
The fiscal first-quarter earnings report released on Friday, although showing a wider net loss compared to the previous year, highlighted significant operational enhancements across the company’s various divisions. This update comes in the wake of a Wall Street Journal report from a month ago suggesting a potential sale to private equity firm Sycamore Partners.
Despite these speculations, Walgreens has dismissed the rumors, with CEO Tim Wentworth choosing not to address the possibility of a buyout during a recent call with analysts and investors.
“In U.S. pharmacy, we maintained script market share, our international business continued to show strong returns, and our U.S. healthcare segment contributed somewhat above expectations and a combination of revenue growth and cost control,” Wentworth stated during the call. “Importantly, we started to progress on the opportunities that we consider essential to our longer-term turnaround.”
Analysts tracking Walgreens have noted a significant stock price increase on Friday, exceeding 25%, which has added more market value to the company and reduced the likelihood of a private equity buyout.
Looking ahead, analysts anticipate continued progress for Walgreens without the involvement of private equity.
“Walgreens’ Q1 2025 earnings report solidifies that the company’s turnaround is officially underway following an incredibly difficult 2024 where it finished as the S&P’s worst-performing stock of the year,” remarked Emarketer analyst Rajiv Leventhal. “CEO Tim Wentworth’s commitment to a retail pharmacy-led operating model indicates that the rumored sale to PE firm Sycamore Partners is less likely.”
While acknowledging Walgreens’ positive performance across its various segments, Mizuho Securities USA analyst Ann Hynes highlighted that soft retail sales remain a challenge for the company.
“We believe the quarter is above investors’ conservative expectations as WBA continues to navigate its debt wall in 2025,” Hynes concluded.
