Finimize - 😷 Walgreens caught a cold

What’s going on here?

Walgreens Boots Alliance coughed up some grim quarterly figures on Tuesday, leaving investors worried about its health.

What does this mean?

You don’t need an MD to see that Walgreens’ past quarter wasn’t particularly healthy. Sure, vaccinations were always going to drop when the US declared an end to the Covid public health emergency – but an 83% plunge was steeper than anyone expected. Toss in near-static prescription fillings and dwindling same-store sales in its retail segment, and it’s clear Walgreens has got a whole cluster of sickly symptoms. That meant the firm missed its earnings bullseye for the first time since 2020. To fix that and lift profitability, Walgreens is tightening its belt even more, but the titan still felt compelled to chop its full-year profit forecast. For investors, that was a bitter pill to swallow – and shares tumbled 9%.

Why should I care?

The bigger picture: Recuperation, but no rest.

Even under the weather, Walgreens has got a game plan. Recent acquisitions show that the company’s going from a pharmacy chain to a fully-fledged healthcare company – and while it may take time for those moves to yield big results, there’s one tailwind that could speed things up. See, Walgreens operates a unit that helps biotechs recruit diverse patient demographics for clinical trials, making use of its huge retail network. And with rival CVS retreating from that line of work, Walgreens will be left to pick up its business.

Zooming out: The other kind of belt-tightening.

Speaking of clinical trials, the results of Eli Lilly’s latest one are out: its highly anticipated experimental weight loss drug has been shown to help patients drop up to 24% of their body weight within a year – a record-breaker in the obesity space. If further trials are successful and the drug gets to market, analysts reckon it could prove to be the highest-selling (legal) drug of all time…

What’s going on here?

UK payments group Wise proved that it deserves its name on Tuesday, announcing a booming yearly profit.

What does this mean?

When Wise went public back in 2021, the company was greeted with all kinds of fanfare – but its share price has fallen by almost half since then, making that bravado seem just a little bit unwise. That said, things have been better this past financial year: the fintech, which specializes in international money transfers, saw customers’ cash balances rise more than 50% in the 12 months through to March. And those piles of cash were then compounded by rising interest rates, helping pre-tax profit more than triple. So despite the staggering economy hitting customers’ transactions, Wise sees interest galore in its future – and investors, who agreed, sent shares up around 20%.

Why should I care?

For markets: Don’t bank on them.

Wise has been making hay while the sun shines (read: while interest rates rise) – but not everyone can keep living it large. UK banks, for one, could be in for a serious shakeup. See, financial institutions have responded to rate hikes by boosting the interest they charge on loans – but they’ve been a whole lot slower to up the interest they offer on folks’ savings. Thing is, government pressure’s mounting, and analysts at JPMorgan think banks might soon have to mend their ways. That could be nice for savers, but not so nice for banks’ profits – especially if the UK has a “hard landing”.

For you personally: Go forth and multiply.

Mind you, there are some pretty juicy interest rates on offer already. And sure, a couple of extra percentage points probably won’t change your life – but every little helps in times like these, and decent rates can help defend your cash against inflation. If you’ve got some money on the sidelines then, shop around and make sure you’re getting a decent rate.