Walgreens Just Got Another Piece of Bad News -- Should You Sell Its Stock?
With shares of Walgreens Boots Alliance (NASDAQ: WBA) falling by 26% in the past 12 months, shareholders probably aren't hungry for more bad news. But in keeping with the chaotic spirit of the 2020s thus far, they're getting some anyway.
The problem this time around is another instance of one of the company's bugbears over the last few years: legal settlements pertaining to its filling of opioid drug prescriptions. Let's get a better understanding of what happened and how it might affect shareholders in the future.
The latest piece of bad news is that Walgreens agreed on May 17 to a $230 million settlement with the city of San Francisco, which was suing it for lack of sufficient due diligence when it filled prescriptions for opioid medications. While the company didn't admit any guilt, it'll be liable for the sum over the next 14 years, with most of it paid before 2031. Given that it has $1.8 billion in cash and equivalents and trailing-12-month free cash flow (FCF) of $982 million, this payout alone will probably not be a significant financial burden.
Source Fool.com
