Walgreens Stock Stumbles Amid Legal Challenges, Throwing Cold Water on Hopes for a Rebound

Core Insights - Walgreens (WBA) faced a challenging year in 2024, but its first-quarter results exceeded expectations, leading to initial optimism for 2025 [2][6] - Despite the positive results, analysts remain cautious, with most maintaining "hold" or "sell" ratings on the stock [6] - A recent lawsuit from the Department of Justice has negatively impacted Walgreens' stock, contributing to a decline of over 9% [2][6] Analyst Ratings - Among eight analysts covering Walgreens, four have issued "hold" ratings, three rated it "sell," and only one gave a "buy" rating, with an average price target of $10.81, slightly below the recent closing price of $11.37 [3] - Jefferies and Deutsche Bank analysts have maintained "hold" ratings, expressing the need for more positive data points before expecting a significant turnaround [4] Business Challenges - Analysts highlighted that despite cost-cutting measures, including the closure of hundreds of underperforming stores, Walgreens' retail pharmacy business is likely to continue facing challenges [5] - The new lawsuit from the DOJ adds regulatory risk to Walgreens' already difficult retail environment, as acknowledged by the CEO during the earnings call [5]