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The
replacement comes less than two months after Walgreens nearly
halved its dividend payout to conserve cash as it seeks to win
back market share from rivals and expand beyond its pharmacies.
The switch was prompted by Walmart's decision to split its
shares, which would reduce the retailer's weightage on the
index.
Walgreens joined the Dow in 2018, replacing industrial
conglomerate General Electric and becoming one of the five
healthcare companies on the elite 30-consituent index. Since
then, the stock has lost about 65% of its value.
The company has appointed new top executives, shut unprofitable
stores and unveiled the dividend cut in January as it deals with
low consumer spending, a drop in COVID-19 product sales and a
slow ramp-up of its nascent healthcare unit.
The stock has posted a decline in seven of the past eight years
and is down nearly 15% since the beginning of 2024. Shares of
Walgreens trade at a forward price-to-earnings ratio of 6.54,
compared with 9 for larger rival CVS Health.
S&P Dow Jones indices said late on Tuesday that adding Amazon
would also increase consumer retail exposure, reflecting "the
evolving nature of the American economy". The change is
effective next week, it said.
Besides dominating online retail, the Seattle-based company is a
major player in cloud computing, entertainment and other
industries.
Amazon's shares rose 1.1% before the bell.
(Reporting by Manas Mishra in Bengaluru; Editing by Shilpi
Majumdar)
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