Is It Finally Time to Buy Walgreens?

Walk into just about any town in America, and chances are you’ll spot a Walgreens. The pharmacy chain is one of the most ubiquitous retail brands in the country, with over 8,000 locations across the U.S. alone.

But while its storefronts are everywhere, the same can’t be said for investor confidence in its stock. Walgreens Boots Alliance (NASDAQ: WBA) has been a serial underperformer, and now, it’s about to exit the public market altogether.

Key Points

• Walgreens’ failed pivots and rising losses led to a dividend cut and urgent need for restructuring.

• Sycamore is acquiring Walgreens for $11.45 per share, capping returns for investors.

• A potential $3 payout from clinic asset sales exists, but timing and value are unclear.

Walgreens Is No Longer the Pillar It Once Was

Let’s call it like it is, Walgreens has been floundering. The company has struggled with the same structural challenges facing all retail pharmacies, including low margins, rising labor costs, reimbursement pressures, and the growing power of vertically integrated competitors like CVS and UnitedHealth that combine insurance, care delivery, and pharmacy benefits under one roof.

But Walgreens hasn’t exactly helped itself either. Its foray into the pharmacy benefits business was short-lived, abandoned after failing to deliver meaningful synergies. That misstep was followed by another pivot, this time into healthcare clinics, notably via a multi-billion-dollar investment into VillageMD and the acquisition of Summit Health.

Unfortunately, integrating these healthcare operations has proven more complex — and less profitable — than hoped. As of early 2025, VillageMD was still burning hundreds of millions in annual losses, and Walgreens announced it would begin selling off non-core clinic assets in an effort to stem the bleeding.

To preserve capital, management slashed the dividend by almost half in early 2024, a move that angered income-focused investors and sent the stock tumbling to its lowest levels in over two decades. At this point, Walgreens wasn’t just on life support, but was actively looking for a way out.

A Buyout Is Happening & the Upside Is Capped

In a surprise move that signaled the end of Walgreens as a public company, the board agreed in July 2025 to sell the company to private equity firm Sycamore Partners.

The transaction values Walgreens at just $11.45 per share, a stunning 80%+ drop from its highs a decade ago.

That price is what current shareholders will receive in cash when the deal closes, expected in the second half of 2025. So what’s the point of buying the stock now?

From a pure return perspective, the answer is, probably none. There’s no long-term upside, once the deal closes, shares will disappear from your brokerage account, replaced by cash. And unless something derails the acquisition, which is always a non-zero possibility in M&A, you’re essentially tying up capital for minimal reward.

But there’s a twist that could make things more interesting…

Wild Card Worth Watching

Buried in the fine print of the Sycamore deal is a contingent value right tied to the future sale of Walgreens’ clinic business.

In plain English if Sycamore sells off the VillageMD/Summit Health assets for a decent price, existing Walgreens shareholders could get a bonus payment.

The CVR could pay out up to $3.00 per share on top of the $11.45 base price if the clinic business is sold for a high enough valuation. That’s roughly a 25% gravy, though it’s far from guaranteed.

There’s no set timeline for the sale, no guaranteed minimum price, and no assurance that any money will be paid out at all. Investors could receive a payout next year, or nothing, ever.

That makes this deal appealing primarily to special situation or event-driven investors comfortable with risk and uncertainty. For most long-term investors, the stock has become a dead-end. Walgreens’ days as a dividend king and value stalwart are firmly in the rearview mirror.

Why Private Equity Might Succeed Where Wall Street Couldn’t

Why is Sycamore stepping in at all? Well, turnarounds are often easier behind closed doors. Private equity firms like Sycamore can cut deeper, restructure faster, and ignore quarterly earnings pressure.

More importantly, Walgreens still owns valuable assets, including prime real estate, a nationwide logistics network, and a brand that ranks among the most trusted in U.S. healthcare.

Sycamore is betting it can unlock value where the public market no longer believes it’s possible.

And better yet, Walgreens owns stakes in AmerisourceBergen, Shields Health Solutions, and several other ventures. These could potentially be monetized in the future, adding to the PE firm’s return, but shareholders today likely won’t see any of that upside.

The Walgreens Story Is Ending for Public Investors

If you own Walgreens stock, you’re probably just counting down the days until the deal closes. If you’re thinking about buying shares now? You’re essentially parking cash for a low-yield payoff, unless you’re gambling on the CVR kicker, which comes with significant uncertainty.

Once a cornerstone of defensive portfolios and dividend-focused strategies, Walgreens has become an exit story. The company’s days on Wall Street are numbered, and unless you have a high risk tolerance and a sharp eye for special situations, it may be time to say goodbye.

That said, don’t count Walgreens out forever. If the Sycamore-led turnaround works, we might just see this icon return to the public markets stronger, leaner, and more relevant than before.