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Shares of Rite Aid Corporation (RAD - Analyst Report) seem to be on a roll as this drugstore chain retailer hit a 52-week high of $8.02 yesterday, before eventually closing at $7.82 for a phenomenal year-over-year return of 209.1%.

This Zacks Rank #1 (Strong Buy) stock has been gaining momentum since the company posted positive comps for the four weeks ended Apr 26, 2014 on May 1. The comps improved 5% year over year, on the back of a rise in front-end and pharmacy comps as well as an improvement in prescription count at comparable stores.

The April comps marked the company’s highest improvement in its monthly comps in about a decade, following which shares have climbed 1.6% to date.

Posting better-than-expected fourth-quarter fiscal 2014 results on Apr 10, 2014 provided further impetus to the stock. Aided by strong revenues and key turnaround initiatives, Rite Aid’s adjusted earnings of 10 cents per share registered year-over-year growth of 42.9% and well surpassed the Zacks Consensus Estimate of 4 cents. Following the earnings release, the company’s shares have surged 12.7%, to date.

On an average, Rite Aid has delivered a positive earnings surprise of 108.9% over the past 7 quarters. The company also provided an impressive guidance for fiscal 2015, making investors constructive of the stock.

Along with its fourth-quarter earnings release, Rite Aid announced the acquisition of RediClinic, one of the major retail clinic operators in the U.S. Though the terms of the deal were not disclosed, we believe that the acquisition is part of the company’s strategic initiatives to enhance its partnerships in the industry to boost the top and bottom lines.

Rite Aid, which is the nation’s third largest drugstore chain, following Walgreen Co. (WAG - Analyst Report) and CVS Caremark Corp. (CVS - Analyst Report), has long-term EPS growth rate of 17.5%, higher than the peer group average of 15.8%. Also, its last traded price is 1% below the Zacks Analyst Price target of $7.90, indicating further upside potential.

Looking ahead, its sustained focus on expanding pharmacy and clinical services through its Wellness+ customer loyalty program and remodeling of wellness stores raise our hopes and instill confidence among investors.

Apart from Rite Aid, V.F. Corporation (VFC - Analyst Report) also hit a 52-week high of $63.99 on May 13, 2014.

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