11:30 AM EDT, 10/11/2024 (MT Newswires) -- Walgreens Boots Alliance ( WBA ) is facing a challenging consumer environment in the US as consumer economic conditions have remained subdued, Morgan Stanley said in a note Friday ahead of the release of the company's fiscal Q4 results on Tuesday.

The investment bank noted that in Q2 earnings, slowing consumer discretionary spending was a theme of many retailers.

"We expect macro headwinds to be an ongoing problem for [Walgreens Boots Alliance ( WBA )], in addition to the natural drop off in retail pharmacy sales that will result from closing a portion of its underperforming stores over the next three years," Morgan Stanley said.

The firm said it lowered its fiscal 2024 earnings-per-share forecast for the company to $2.85 from its previous expectation of $2.88 "on more subdued retail trends."

Morgan Stanley cut its price target on the company to $7 from $9 and kept its underweight rating.

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