Walgreens Boots Alliance, Inc. (WBA) DCF Valuation
TGM's two-stage DCF values Walgreens Boots Alliance, Inc. (WBA) between $9.83 and $26.62 depending on assumptions, with a base case of $16.43. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (8%) reflects its beta.
What would today's price require?
$11.98 is justified only if free cash flow grows about -0.9% a year (fading to 2.5% long-run) at a 8% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 9.0% | $9.83 |
| Base case | 3.5%/yr | 8.0% | $16.43 |
| Optimistic | 6.5%/yr | 7.0% | $26.62 |
Current Price
$11.98
Market-Implied Growth
-0.9%/yr
vs +3.5% 5Y actual
Model Scenario Range
$9.83 – $26.62
model output — not a price target
WBA DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for WBA (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.2B · 0.87B shares · net debt $8.2B
Estimated Fair Value
$17.33
+44.7% vs $11.98
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 3.5%/yr FCF growth and 10-year horizon fixed. Green = above today's $11.98; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.0% | $25.87 | $28.96 | $32.93 | $38.23 | $45.64 |
| 7.0% | $19.26 | $21.12 | $23.39 | $26.23 | $29.88 |
| 8.0% | $14.70 | $15.91 | $17.33 | $19.04 | $21.13 |
| 9.0% | $11.36 | $12.19 | $13.14 | $14.25 | $15.56 |
| 10.0% | $8.82 | $9.40 | $10.07 | $10.83 | $11.70 |
About Walgreens Boots Alliance, Inc.
Walgreens Boots Alliance, Inc., established in 1901 and based in Deerfield, Illinois, operates as a leading global retailer focused on pharmacy, health, and beauty products. Its business activities are organized into two primary divisions: the United States and International. In the United States, the company dispenses prescription drugs and offers a diverse selection of retail goods. This includes items for health, wellness, beauty, and personal care, alongside general merchandise and consumable products, all available through its extensive network of retail drugstores. The U.S. segment also provides specialized central pharmacy services and mail delivery options for prescriptions. As of August 31, 2021, this division managed 8,965 retail outlets under the Walgreens and Duane Reade banners, complemented by five specialty pharmacies. The International segment focuses on the sale of prescription medications, health and wellness items, beauty products, personal care essentials, and other consumer goods. These are sold through its pharmacy-centric health and beauty retail locations, optical practices, its online platform boots.com, and an integrated mobile application. Additionally, this segment engages in pharmaceutical wholesale and distribution operations within Germany. By August 31, 2021, the international portfolio included 4,031 retail stores operating under brands such as Boots, Benavides, and Ahumada, located across countries including the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile. It also oversaw 548 optical practices, with 160 of these operating as franchises.
- Sector
- Healthcare
- Industry
- Medical - Pharmaceuticals
- CEO
- Timothy C. Wentworth