WBA hit record lows in late November but rallied over 30% in December
The first big earnings report of the year is coming up on Thursday, Jan. 4, with Walgreens Boots Alliance Inc (NASDAQ:WBA) scheduled to announce its latest quarterly report before the open. The drugstore is expected to post profits of 63 cents per share, which is lower than the $1.16 announced for the same quarter last year.
On the charts, WBA just ran up to long-term pressure at its 200-day moving average, which kept a cap on the stock's December 30.9% rally from its Nov. 30 record lows at $19.68. Despite the latest rally, over the past year, the equity has declined 29.3%.
Walgreens stock has only closed three of its last eight post-earnings sessions higher, including a 7% pop this past October amid a series of updates from the company. The options pits are pricing in a 12.6% move this time around, regardless of direction, which is much larger than the 5.8% swing the stock has averaged over the past two years.
A post-earnings move in either direction could shake hesitant analysts loose, with 10 of the 15 in coverage maintaining tepid "hold" ratings. There's also some short squeeze potential, with short interest representing a healthy 6% of WBA's total available float despite falling in the most recent reporting period.
Options look like a good way to go when weighing in on Walgreens. Its Schaeffer's Volatility Scorecard (SVS) of 87 out of 100 means the stock usually exceeds volatility expectations.