Is Walgreens Boots Alliance (WBA) One of the Best Medical Stocks Under $20? Here’s What You Need to Know

The healthcare industry is one of the largest and fastest-growing sectors globally, driven by technological advancements, an aging population, and rising healthcare costs. As we step into 2024, healthcare stocks are attracting attention, particularly those priced under $20. Among these, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stands out as a contender in the medical stock arena. But where does WBA rank compared to other healthcare stocks in this category?

Healthcare Growth & Technological Advancements

The global healthcare sector is experiencing rapid growth, driven by innovations in AI, increasing medical technology, and greater demand for healthcare services. Deloitte’s 2024 Global Healthcare Sector Outlook highlights the rise of AI tools in healthcare, improving clinical outcomes and operational efficiency. The growing use of these technologies, especially in AI-driven clinical care, is expected to play a pivotal role in the sector’s continued expansion.

In the U.S., healthcare spending surged to $4.9 trillion in 2023, representing 17.6% of the GDP. The demand for healthcare services, including pharmaceuticals, medical devices, and wellness services, remains robust. As healthcare costs rise, companies like Walgreens Boots Alliance are working to adapt by optimizing costs and services.

Walgreens Boots Alliance (WBA) – An Overview

Walgreens Boots Alliance (WBA) is a significant player in the healthcare and retail space, operating more than 12,500 locations across the U.S., Europe, and Latin America. The company offers a wide range of services, including pharmacy, healthcare services, and retail products, under well-known brands like Walgreens, Boots, and Duane Reade.

Despite the company’s massive footprint, Walgreens Boots Alliance is actively focusing on cost management and streamlining its operations. In its fiscal 2024, the company exceeded its targets for cost savings and capital expenditure reductions, which included $1 billion in cost savings and a $600 million decrease in capital expenditures.

The company is also adjusting its retail footprint, with plans to close approximately 1,200 underperforming stores over the next three years, with 500 closures slated for fiscal 2025. These closures are part of a strategic effort to optimize operations and improve free cash flow and adjusted earnings per share (EPS).

Why WBA Stands Out in the Medical Stock Space

Walgreens Boots Alliance’s stock price of $9.22 as of January 8, 2024, makes it one of the most affordable options among healthcare companies. Additionally, its efforts to streamline operations, reduce costs, and focus on high-growth areas like health and wellness position the company to adapt to evolving consumer needs.

In fiscal 2024, Walgreens Boots Alliance successfully launched over 300 new owned brand products, and the company plans to introduce another 300 products in fiscal 2025. This product diversification strategy aims to boost revenue from private-label products while maintaining a strategic focus on healthcare and wellness categories.

However, despite these initiatives, Walgreens Boots Alliance (WBA) ranks 9th on our list of best medical stocks to buy under $20. While it has significant growth potential, it faces stiff competition from other healthcare stocks and emerging trends like AI in healthcare.

WBA’s Position in a Competitive Market

As of Q3 2024, Walgreens Boots Alliance is held by 33 hedge funds, which reflects a moderate level of investor confidence. Despite its solid track record and strategic moves, the broader medical sector offers a range of other promising opportunities, particularly those related to AI and advanced healthcare technologies.

Given the continued evolution of healthcare and medical technologies, some AI-focused medical stocks are seeing greater promise in terms of rapid growth and innovation. These stocks might offer more compelling short-term returns, especially as the sector embraces artificial intelligence for enhancing patient care and operational efficiency.

In Conclusion: Walgreens Boots Alliance in the Context of Other Medical Stocks

With the healthcare sector poised for significant growth, Walgreens Boots Alliance (WBA) offers investors a stable and affordable option for exposure to the healthcare space. However, for those looking for higher growth potential and quicker returns, stocks driven by AI technologies in healthcare may prove to be more promising investments.

Stay tuned as we continue to explore the best medical stocks and AI-driven opportunities that could offer substantial returns in the coming years.