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Bear of the Day: Rite Aid (RAD)

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Today’s Bear of the Day is a stock that has seen earnings estimate revisions go in the wrong direction, down. That means that analysts all over Wall Street have been changing how they feel about this stock. That does not mean that the death knell is tolling. Rather, it is just something that long-term investors should take note of if they haven’t already. This could be a small blip, or it could be the start of something worse.

Today’s Bear of the Day is Rite Aid (RAD - Free Report) . For a while there, it seemed that Rite Aid was destined to merge with Walgreen’s (WBA - Free Report) , forever changing the fate of the company. After the merger failed, Rite Aid was left to fend for itself. In a world with ever-increasing competition from online giants and retail locations, it could not have come at a worse time.

Rite Aid is a Zacks Rank #5 (Strong Sell). The reason for the bearish rank is the series of negative earnings revisions coming from analysts. Over the last thirty days, two analysts have cut estimates for the current year while one has followed suit for next year. The bearish revisions have cut our Zacks Consensus Estimates for the current year from $1.70 per share profit to an 80-cent loss. Next year’s numbers have been slashed from a 14-cent profit to a 22-cent loss. Not the trend you want to see over the long run.

The Retail – Pharmacies and Drug Stores industry ranks in the Bottom 48% of our Zacks Industry Rank. There are other stocks within the same industry which have more favorable ranks. Among them are Zacks Rank #1 (Strong Buy) Herbalife (HLF - Free Report) as well as a couple of Zacks Rank #3 (Hold) stocks in CVS Health (CVS - Free Report) and Walgreens Boots Alliance (WBA - Free Report) .

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