Analysts at Deutsche Bank provided their views on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) following the reported Q2 results last week, with EPS beat but maintained 2022 guidance.

The company’s Q2 adjusted EPS came in at $1.59, beating the Street estimates of $1.37, and revenue at $33.76 billion, slightly above the Street estimate of $33.32 billion. According to analysts at Deutsche Bank, the beat was mostly driven by the strong demand for COVID vaccines and testing amid the Omicron surge. The company administered 11.8 million COVID vaccines and 6.6 million tests during the quarter.

Despite the beat, management maintained fiscal 2022-year guidance of low single-digit EPS growth, implying a sharp earnings decline in the second half and likely steep margin compression in the core US business.

The company’s stock lost around 9% since the earnings announcement. According to the analysts, this is a result of investors’ concern that the rising wages, inflation, and reimbursement pressure are likely to continue weighing on the business.