Why Walgreen Boots Alliance Stock Popped Today

Shares of Walgreens Boots Alliance (NASDAQ: WBA) were moving higher today after CNBC's David Faber said that a possible deal to take over the ailing pharmacy and urgent-care chain was still alive.

Trading in the stock was also halted Tuesday morning, which can indicate a major announcement, though no news came out. As of 10:48 a.m. ET, the stock was up 10.2%.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Is a deal in the works?

Walgreens has been struggling for years. It overpaid in its acquisition of VillageMD urgent care centers, and it has faced other headwinds related to opioid lawsuits and a slowdown in COVID vaccine sales.

After that collapse in the stock, its market cap has fallen to just $9.3 billion, potentially making it an attractive acquisition target because its assets, which include roughly 10,000 stores in the U.S., could be worth much more than that.

Back in December, several media outlets reported that private equity firm Sycamore was interested in making a play for Walgreens, though it's unclear if a deal would go through.

Faber's comment today had investors feeling optimistic about a potential deal.

Good news for Walgreens stockholders

At this point, a deal seems like the best outcome for Walgreens. Though there's been some evidence of a turnaround as it returned to growth in sales and adjusted earnings per share, it still faces a number of challenges.

Management cut its dividend by roughly 50% a year ago, but it could face pressure again given the volatile nature of the business.

It's unclear what Sycamore's buyout price would be, but expect Walgreens stock to keep moving on the buyout rumors.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $360,040!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,374!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $570,894!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 3, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.