Is Walgreens Boots Alliance, Inc. overvalued or undervalued?

As of 28 March 2024, Walgreens Boots Alliance, Inc. has moved from a valuation grade of very attractive to risky. The company is currently assessed as overvalued, given its significant financial challenges and poor performance metrics. The P/E ratio is not applicable due to losses, while the Price to Book Value stands at 1.86, and the EV to EBITDA is at 7.86, indicating a high valuation relative to earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Walgreens Boots Alliance's valuation appears unfavorable. For instance, AbbVie, Inc. has a P/E ratio of 22.80 and Merck & Co., Inc. has a P/E of 14.42, both of which suggest a more favorable valuation environment. Additionally, Walgreens' return on equity (ROE) is notably negative at -9.46%, contrasting sharply with the industry averages. The company's recent stock performance has been poor, with a one-year return of -28.93%, significantly underperforming the S&P 500's 10.26% return, reinforcing the notion that Walgreens Boots Alliance is currently overvalued.