Though a market entrant like Amazon is a reason for concern, there are other reasons why Rite Aid's stock price is plunging. The stock price declined sharply in June when its probable merger with Walgreens got canceled due to the lack of approval from the Federal Trade Commission.
What challenges are ahead for Rite Aid stock?
Challenges remain for the drugstore chain, including its hefty debt load and rising interest rates. That said, on Thursday, investors were celebrating Rite Aid's better-than-expected results as a step in the right direction.
Should you buy or sell Rite Aid stock?
3 Wall Street equities research analysts have issued "buy," "hold," and "sell" ratings for Rite Aid in the last twelve months. There are currently 2 sell ratings and 1 hold rating for the stock. The consensus among Wall Street equities research analysts is that investors should "sell" Rite Aid stock.
Why are Rite Aid shares sinking 8% Thursday?
Shares of Rite Aid ( NYSE:RAD) were sinking 8% as of 11:06 a.m. EDT on Thursday. The decline came after the pharmacy chain announced its second-quarter earnings results before the market opened. Revenue from continuing operations in the second quarter was $6.11 billion, up 2.2% year over year.
What drove Rite Aid's revenue in the quarter?
For the quarter, which ended May 28, Rite Aid reported revenue of $6. 01 billion, down 2. 3% year over year. While that might not seem worth writing home about, it's important to put that into context. Last year at this time, a major wave of COVID-19 vaccinations was boosting Rite Aid's top line.
Why Rite Aid stock so low?
Rite Aid hit a sentiment low point on April 7, 2022, when Deutsche Bank downgraded it to a Sell rating with a rock bottom price target of $1 on the post-pandemic recessive effects as a going concern. As the pandemic migrates to the rearview mirror, so do any prospects of profits for Rite Aid.
Why is Rite Aid Struggling?
The Deutsche Bank analysts estimate that COVID-19 vaccines and tests have contributed well over $200 million to Rite Aid's earnings. A “sharply lower COVID contribution” to Rite Aid's profits would make it all the more difficult for the retailer to meet its cash needs, according to Hill's team.
Is Rite Aid in financial trouble?
Rite Aid is in a worse position today than it was a decade ago. The pharmacy retailer is dealing with its debt, but it'll take a long time to reach a more manageable level. Its low valuation signals broad pessimism about its prospects.
Is Rite Aid a good investment?
Rite Aid Corporation - Hold Its Value Score of A indicates it would be a good pick for value investors. The financial health and growth prospects of RAD, demonstrate its potential to outperform the market. It currently has a Growth Score of A.
Does Rite Aid have a future?
Rite Aid Healthy Futures, formerly known as the Rite Aid Foundation, is relaunching with its $10 million Strengthening Cities initiative that supports healthier and more equitable neighborhoods. A healthier future is the overall mission of Rite Aid Healthy Futures, the charity formerly known as the Rite Aid Foundation.
What is the future of Rite Aid?
The retailer is coming off a modestly successful Q3 2022, with retail pharmacy segment revenues up 7.9% and same-store sales up 4.4% in in Q3 2021, but the company experienced an overall net loss of $36 million during the quarter. Rite Aid expects its store closures to have positive results in the long run.
Will Rite Aid be bought out?
Attempted acquisition by Albertsons On February 20, 2018, Albertsons announced plans to acquire the remainder of Rite Aid, including the 2,600 stores not acquired by Walgreens, in a merger of equals, subject to shareholder and regulatory approval.
Why are so many Rite Aid's closing?
The store closings come in response to significant challenges the company faced due to the pandemic, including supply chain pressures that influenced inventory and sales, shifting store traffic due to increased work-from-home trends, and a tightening labor market.
Will Rite Aid stock go up?
quote is equal to 6.295 USD at 2022-06-21. Based on our forecasts, a long-term increase is expected, the "RAD" stock price prognosis for 2027-06-16 is 22.078 USD. With a 5-year investment, the revenue is expected to be around +250.72%. Your current $100 investment may be up to $350.72 in 2027.
Is Rite Aid undervalued?
Rite Aid Corp holds a recent Real Value of $8.38 per share. The prevailing price of the company is $6.2. At this time, the company appears to be undervalued....USD 6.20 0.14 2.31%LowTarget PriceHigh14.0015.0016.00
Is Rad a buy or sell?
Rite Aid has received a consensus rating of Sell. The company's average rating score is 1.00, and is based on no buy ratings, no hold ratings, and 3 sell ratings.
NYSE: RAD
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What happened
Shares of Rite Aid ( RAD 2.31% ) were sinking 8% as of 11:06 a.m. EDT on Thursday. The decline came after the pharmacy chain announced its second-quarter earnings results before the market opened.
So what
Revenue from continuing operations in the second quarter was $6.11 billion, up 2.2% year over year. This fell short of the Wall Street consensus estimate of $6.21 billion.
Now what
Rite Aid thinks that it could receive a boost from increased demand for COVID vaccines and testing through the end of the year. The company increased its full-year guidance for adjusted earnings before interest, taxes, depreciation, and amortization ( EBITDA) to a range of $460 million to $500 million.
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Investors don't like the company's first-quarter update
Keith began writing for the Fool in 2012 and focuses primarily on healthcare investing topics. His background includes serving in management and consulting for the healthcare technology, health insurance, medical device, and pharmacy benefits management industries. Follow @keithspeights
What happened
Shares of Rite Aid ( NYSE:RAD) were plunging 14.3% lower as of 11:22 a.m. EDT on Thursday. The steep decline came after the pharmacy retailer reported its fiscal 2022 first-quarter results before the market opened.
So what
As you might expect after today's sell-off of the healthcare stock, investors weren't happy with Rite Aid's first-quarter results. The company reported revenue of $6.16 billion, below the consensus estimate of $6.21 billion. However, Rite Aid's adjusted earnings of $0.38 per share easily beat the average analysts' estimate of $0.22 per share.
Now what
It's more important to focus on a company's long-term prospects than how it performs in a single quarter. Rite Aid CEO Heyward Donigan said she thinks the pharmacy retailer is on the right track going forward, saying, Rite Aid is in a position to benefit from "a healthier economy and the reopening of the communities we serve."
About Rite Aid
Rite Aid Corp. engages in the ownership and management of retail drug stores. It operates through following segments: Retail Pharmacy and Pharmacy Services. The Retail Pharmacy segment includes branded and generic prescription drugs, health and beauty aids, personal care products, and walk-in retail clinics.
Rite Aid (NYSE:RAD) Frequently Asked Questions
3 Wall Street research analysts have issued "buy," "hold," and "sell" ratings for Rite Aid in the last twelve months. There are currently 2 sell ratings and 1 hold rating for the stock. The consensus among Wall Street research analysts is that investors should "sell" Rite Aid stock. View analyst ratings for Rite Aid or view top-rated stocks.
Rite Aid to shutter two Sacramento locations as part of corporate closure plan
Two Sacramento Rite Aid locations are expected to close over the next few weeks, a company representative confirmed to the Business Journal.
Rite Aid Corporation -- Moody's announces completion of a periodic review of ratings of Rite Aid Corporation
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Rite Aid CorporationGlobal Credit Research - 04 Feb 2022New York, February 04, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Rite Aid Corporation and other ratings that are associated with the same analytical unit.
How much revenue did Rite Aid make in the fourth quarter?
Rite Aid reported revenue in the fourth quarter of $5.7 billion, up nearly 6% year over year. However, the revenue total wasn't enough to make Wall Street happy. The analysts' consensus estimate projected Q4 revenue of $5.59 billion.
How much revenue will Rite Aid have in 2021?
The company announced in March that it expects full-year fiscal 2021 revenue between $22.5 billion and $22.9 billion, with a net loss between $91 million and $119 million. Rite Aid didn't change this guidance in its Q4 update.
