We recently published a list of Must-See: Jim Cramer's 10 Best Stock Picks for Investors Right Now. In this article, we are going to take a look at where Walgreens Boots Alliance Inc. (NASDAQ:WBA) stands against other Jim Cramer's best stocks for investors.
In a recent episode of Mad Money, Jim Cramer discussed how the slowing economy might lead the Federal Reserve to ease its policies. He expects the Fed to cut interest rates, but it's unclear whether the reduction will be 25 or 50 basis points. This decision is crucial as it could significantly impact the market.
Cramer pointed out that Friday's market performance was strong, with the Dow gaining 297 points, the S&P rising by 0.54%, and the Nasdaq increasing by 0.65%. This marked the best two weeks of the year for the S&P and the Nasdaq, suggesting that the market might be anticipating a larger rate cut of 50 basis points. Stocks sensitive to interest rates, particularly in housing, surged in response.
Cramer also cautioned that if the housing market rally continues, it could lead to a sell-off if only a 25 basis point cut is announced. He pointed out that traders are currently pricing in a higher chance of a 50 basis point cut, according to the CME Group's FedWatch tool. If the Fed opts for a smaller cut, traders who bought in anticipation of a larger reduction might sell off their stocks, potentially causing market volatility.
Jim Cramer warned that if the housing market rally keeps going, it might lead to a sell-off if the Federal Reserve announces only a 25 basis point rate cut. If the Fed delivers a smaller cut, traders who anticipated a bigger reduction might start selling their stocks, which could lead to increased market volatility.
Finally, Jim Cramer believes that this week is critical for the market. He advised that if the market declines after a 25 basis point cut, investors should remember the strong performance of the past week. This week's gains could be a sign of more positive developments as the Federal Reserve continues to ease its monetary policy.
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Jim Cramer reported that TD Cowen has noted Walgreens Boots Alliance Inc. (NASDAQ:WBA) is falling behind on its restructuring efforts. Walgreens Boots Alliance Inc. (NASDAQ:WBA) plans to close 2,000 underperforming locations, but so far only 1,000 have been shut down. The process of closing these stores has turned out to be more challenging than initially expected.
Walgreens Boots Alliance Inc. (NASDAQ:WBA) presents a strong investment opportunity due to its strategic growth in healthcare services, solid retail pharmacy performance, and robust international expansion. Walgreens Boots Alliance Inc. (NASDAQ:WBA) is significantly increasing its presence in healthcare through VillageMD and Shields Health Solutions, which contributed to a 7.6% revenue increase in its U.S. Healthcare segment. VillageMD's expansion enhances Walgreens Boots Alliance Inc. (NASDAQ:WBA)'s role in primary care.
In retail, despite challenges, the U.S. pharmacy business has shown resilience, with a 4.4% year-over-year sales increase driven by prescription growth and higher branded drug prices. Internationally, Walgreens Boots Alliance Inc. (NASDAQ:WBA)'s Boots UK segment is performing well, with a 6.0% rise in comparable retail sales and a 13.8% boost in online sales.
Walgreens Boots Alliance Inc. (NASDAQ:WBA) is also managing cost pressures effectively and improving profitability through ongoing cost-cutting measures, achieving positive EBITDA in its healthcare segment. Walgreens Boots Alliance Inc. (NASDAQ:WBA)'s high dividend yield of around 5% and its perceived undervaluation make it attractive to income-focused investors. As Walgreens Boots Alliance Inc. (NASDAQ:WBA) continues to shift towards healthcare and leverage its international growth, it offers a compelling long-term investment opportunity with the potential for further gains if earnings forecasts improve.
Ariel Appreciation Fund stated the following regarding Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q2 2024 investor letter:
Overall, WBA ranks 9th on our list of Jim Cramer's 10 best stocks for investors. While we acknowledge the potential of WBA as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WBA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.