Zacks Investment Research Lowers Rite Aid (RAD) to Hold

Zacks Investment Research lowered shares of Rite Aid (NYSE:RAD) from a buy rating to a hold rating in a research note issued to 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.”

Other research analysts also recently issued research reports about the stock. TheStreet downgraded shares of Rite Aid from a c- rating to a d rating in a research report on Wednesday, August 8th. Mizuho reaffirmed a hold rating and issued a $2.00 target price on shares of Rite Aid in a research report on Thursday, August 9th. Loop Capital set a $1.00 target price on shares of Rite Aid and gave the company a hold rating in a research report on Friday, September 28th. Royal Bank of Canada set a $1.00 target price on shares of Rite Aid and gave the company a hold rating in a research report on Monday, September 24th. Finally, Cowen downgraded shares of Rite Aid from an outperform rating to a market perform rating and raised their target price for the company from $2.35 to $6.00 in a research report on Monday, August 13th. Two research analysts have rated the stock with a sell rating, five have issued a hold rating and one has assigned a strong buy rating to the stock. The stock has an average rating of Hold and a consensus target price of $2.04.

Rite Aid stock opened at $1.04 on Monday. The firm has a market capitalization of $1.18 billion, a P/E ratio of -52.00 and a beta of 1.42. Rite Aid has a 1-year low of $0.98 and a 1-year high of $2.55. The company has a quick ratio of 0.94, a current ratio of 1.62 and a debt-to-equity ratio of 2.41.

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

Several institutional investors and hedge funds have recently made changes to their positions in RAD. BNP Paribas Arbitrage SA grew its position in shares of Rite Aid by 597.0% in the 2nd quarter. BNP Paribas Arbitrage SA now owns 130,905 shares of the company’s stock valued at $226,000 after acquiring an additional 112,125 shares during the period. Commonwealth of Pennsylvania Public School Empls Retrmt SYS bought a new position in shares of Rite Aid in the 2nd quarter valued at about $3,774,000. Rhumbline Advisers grew its position in shares of Rite Aid by 2.8% in the 2nd quarter. Rhumbline Advisers now owns 1,096,828 shares of the company’s stock valued at $1,898,000 after acquiring an additional 30,154 shares during the period. Bank of New York Mellon Corp grew its position in shares of Rite Aid by 26.8% in the 2nd quarter. Bank of New York Mellon Corp now owns 5,522,163 shares of the company’s stock valued at $9,553,000 after acquiring an additional 1,168,099 shares during the period. Finally, Russell Investments Group Ltd. grew its position in shares of Rite Aid by 119.5% in the 2nd quarter. Russell Investments Group Ltd. now owns 245,756 shares of the company’s stock valued at $429,000 after acquiring an additional 133,800 shares during the period. 50.12% of the stock is owned by institutional investors.

About Rite Aid

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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