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Walgreens Boots Alliance (NASDAQ:WBA) announced a major round of store closures on Thursday as part of a company-wide strategic review, hurting the shares of its rival pharmacy chain CVS Health (NYSE:CVS) and pharmaceutical distributor Cencora (NYSE:COR).
The announcement coincided with the drug store chain’s Q3 results for fiscal 2024, which also fell short of Wall Street’s earnings forecasts and sent the company’s stock to an all-time low with a ~24% intraday drop.
While CVS (CVS) shares have dropped 4%, the biggest intraday loss since May, Cencora (COR), which counts Walgreens (WBA) as its biggest customer, has lost ~6%, marking the biggest intraday selloff since May 2022.
Walgreens (WBA) accounted for ~26% of Cencora’s (COR) revenue in fiscal 2023, well ahead of Cigna’s (CI) Express Scripts unit, which made up ~14%.
“It is never a positive when your largest customer is struggling,” Bloomberg News reported, quoting Leerink Partners analyst Michael Cherny as saying in reaction.
“We obviously will need to see how WBA’s pacing of store closures plays out to understand the flow-through potential to COR,” the analyst added, maintaining the Outperform recommendation on the stock.