Walgreens Stock Tumbles on Dividend Suspension

Walgreens Boots Alliance (WBA) shares are sinking in premarket trading, as the pharmacy chain suspends quarterly dividends to shore up its finances while it works to turnaround its business.

“The company’s cash needs over the next several years, including with respect to litigation and debt refinancing, were important considerations as part of the decision to suspend the dividend,” the company said in a news release.

The U.S. Department of Justice earlier this month announced a lawsuit accusing the pharmacy chain of dispensing “millions of unlawful prescriptions” that had no legitimate medical purpose.

The legal challenge adds to already downbeat views on the company from analysts. Jefferies warned that despite the company’s cost-cutting efforts like closing hundreds of “underperforming” stores, the company’s retail pharmacy business is likely to “remain challenged.

Walgreens shares are trading down more than 10% in premarket trading and have lost around half their value in the past year through Thursday.