Earnings season has kicked off and investors are already chasing the winners higher and punishing the losers. It is not exactly a secret that investors chase performance. That’s why it is so important to keep track of how companies react after they report earnings, particularly when they beat expectations.

Walgreens Boots Alliance Inc. (NASDAQ: WBA) reported fiscal fourth-quarter with adjusted diluted earnings per share (EPS) of $1.02 on net sales of $34.7 billion. Walgreen had reported EPS of $1.43 on revenue of $33.95 billion for the same period in 2019, but the results beat the consensus estimates for EPS of $0.96 and $34.37 billion in sales.

For the full fiscal year, Walgreens reported EPS of $4.74 and sales of $139.5 billion, compared to 2019 EPS of $5.99 and sales of $136.87 billion. Walgreens noted that COVID-19-related effects cost the company about $0.46 per share in the quarter, and lower U.S. pharmacy gross profits and higher bonus payments also acted as a drag on its earnings.

Walgreens Boots Alliance has been a continued earnings disappointment long before COVID-19. Its stock has slid lower and lower over time, and turnaround investors are now likely to wonder if the time is right to finally buy this stock with ridiculously low valuations.

24/7 Wall St. had recently named Walgreens Boots Alliance as one of the top 9 Dow earnings reports to watch for serious recovery potential.

Looking forward, Walgreens guided adjusted EPS growth in the low-single-digits. The pharmacy giant and Dow stock did note that its first-half results are likely to continue seeing negative effects from the coronavirus outbreak, but the company expects “strong” EPS growth in the second half of the 2021 fiscal year. Analysts have a consensus first-quarter EPS estimate of $1.03 on revenue of $34.91 billion. For the full fiscal year, they’re looking for EPS of $4.80 and sales of $142.86 billion.

One aspect to consider is that pharmacy sales are not likely to remain depressed forever. Walgreens is considered an essential business. It hasn’t even benefited from joining the Dow, as the index creators would have hoped. Despite bottoming above $40 a share in March before the V-bottom recovery took the stock back above $50, every recovery effort since has failed.

Even with shares up 4% at $37.40 in Thursday afternoon trading, Walgreens Boots Alliance stock is still down over 35% year to date. Its dividend yield is now accidentally high at 5.2%, and the Refinitiv consensus analyst price target is now only $40 when the stock is valued at about 8-times expected earnings.

Walgreens shares have lost 44% of their value over the past 12 months and 55% over the past 3 years. It seems that Walgreens should have recovered as a stock along with with other essential retail plays. Rival CVS has been weak as well in 2020, and there are always risks from the election and from telehealth competing with in-store health services.

The valuations and expectations for Walgreens were so low coming into earnings that any remotely decent news should have acted to boost the stock. That appears to have been the case. Most analysts rate the stock a Hold, although both BofA and Goldman Sachs have recent Sell ratings on it and price targets of $37 and $33, respectively.

For investors who are looking for low valuations and where the downside has already been, shares of Walgreens Boots Alliance may get more attention than it has been given in recent months.

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