Rite Aid (RAD) Cut to “Hold” at Zacks Investment Research

Rite Aid (NYSE:RAD) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Monday.

According to Zacks, “After two failed mergers, Rite Aid is striving to return on growth trajectory through the execution of standalone strategy, aimed at capitalizing on growth potential. It is leveraging retail pharmacies, EnvisionRxOptions PBM as well as health and wellness offerings. Further, recent changes to board and governance reflect its commitment to turning around performance. Backed by these initiatives, front-end and pharmacy comps improved significantly in second-quarter fiscal 2019, which aided the top line. Sales beat estimates for the second straight quarter. Moreover, the company reiterated sales and comps view for fiscal 2019. However, investors are concerned about the soft adjusted EBITDA guidance due to unfavorable trends in the generic drug market, and the widened net loss forecast for fiscal 2019 as a result of impairment charges incurred in the fiscal second quarter. Consequently, the stock lagged the industry in the last three months.”

A number of other analysts have also recently issued reports on the stock. Loop Capital set a $1.00 target price on shares of Rite Aid and gave the stock a “hold” rating in a research note on Friday, September 28th. Royal Bank of Canada set a $1.00 target price on shares of Rite Aid and gave the stock a “hold” rating in a research note on Monday, September 24th. Goldman Sachs Group assumed coverage on shares of Rite Aid in a research note on Thursday, September 6th. They set a “sell” rating and a $1.00 target price for the company. Cowen lowered shares of Rite Aid from an “outperform” rating to a “market perform” rating and raised their price target for the stock from $2.35 to $6.00 in a research report on Monday, August 13th. Finally, TheStreet lowered shares of Rite Aid from a “c-” rating to a “d” rating in a research report on Wednesday, August 8th. Two research analysts have rated the stock with a sell rating, six have issued a hold rating and one has issued a strong buy rating to the stock. The stock currently has a consensus rating of “Hold” and a consensus price target of $2.06.

Shares of NYSE RAD traded up $0.01 during mid-day trading on Monday, reaching $1.11. 57,385 shares of the company were exchanged, compared to its average volume of 9,330,792. The company has a debt-to-equity ratio of 2.41, a quick ratio of 0.94 and a current ratio of 1.62. The stock has a market cap of $1.18 billion, a PE ratio of -56.00 and a beta of 1.43. Rite Aid has a twelve month low of $0.98 and a twelve month high of $2.55.

Rite Aid (NYSE:RAD) last posted its earnings results on Thursday, September 27th. The company reported ($0.01) earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of ($0.01). The company had revenue of $5.42 billion during the quarter, compared to analysts’ expectations of $5.36 billion. Rite Aid had a net margin of 3.26% and a negative return on equity of 1.97%. Rite Aid’s quarterly revenue was up 1.4% compared to the same quarter last year. During the same quarter last year, the company posted ($0.01) EPS.

A number of large investors have recently added to or reduced their stakes in RAD. Northern Trust Corp increased its position in Rite Aid by 124.0% during the second quarter. Northern Trust Corp now owns 12,115,100 shares of the company’s stock worth $20,959,000 after acquiring an additional 6,706,701 shares during the period. Private Management Group Inc. bought a new position in Rite Aid during the second quarter worth about $11,435,000. Sarbit Advisory Services Inc. bought a new position in Rite Aid during the second quarter worth about $7,987,000. Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corp increased its position in Rite Aid by 20.2% during the second quarter. Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corp now owns 22,604,480 shares of the company’s stock worth $39,106,000 after acquiring an additional 3,797,936 shares during the period. Finally, Alpine Associates Management Inc. increased its position in Rite Aid by 35.0% during the second quarter. Alpine Associates Management Inc. now owns 13,514,200 shares of the company’s stock worth $22,840,000 after acquiring an additional 3,502,400 shares during the period. 50.12% of the stock is currently owned by institutional investors and hedge funds.

Rite Aid Company Profile

Rite Aid Corporation, through its subsidiaries, operates a chain of retail drugstores in the United States. It operates through two segments, Retail Pharmacy and Pharmacy Services. The Retail Pharmacy segment sells prescription drugs and a range of other merchandise, including over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise, and other every day and convenience products.

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