Retail

What to Expect From Rite Aid Earnings

Chris Lange

Published: April 6, 2016 12:50 pm

Last Updated: January 13, 2020 11:05 am

Rite Aid Corp. (NYSE: RAD) is scheduled to report its fiscal fourth-quarter financial results before the markets open on Thursday. The consensus estimates from Thomson Reuters call for $0.06 in earnings per share (EPS) on $6.40 billion in revenue. In the same period of last year, it posted EPS of $0.12 and $6.85 billion in revenue.

This company remains caught in what many investors equate to a merger time warp. That often just might not mean that the low volatility in a post-merger announcement leaves any great value or upside in the turnaround pharmacy chain. In the case of Rite Aid, it could be the opposite.

Credit Suisse started new analyst coverage on many health care related stocks on Wednesday, issuing very positive views on Rite Aid and on would-be acquirer Walgreens Boots Alliance Inc. (NASDAQ: WBA).

Walgreens announced in late 2015 that it would acquire Rite Aid for $9.00 per share. The annualized upside if the deal closes is closer to 26%, if the August 31 time and date is allowed to close. Some investors worry that regulatory powers might pose a hurdle.

A few other analysts commented on the company ahead of the earnings report:

• Credit Suisse reiterated an Outperform rating with a $9 price target.
• Jefferies has a Hold rating with a $9 price target.
• Evercore ISI has a Hold rating with a $9 price target.

So far in 2016, Rite Aid has outperformed the broad markets, with the stock up nearly 4%. However, over the past 52 weeks the stock is down about 8%.

Shares were trading at $8.11 on Wednesday, with a consensus analyst price target of $9.00 and a 52-week trading range of $5.88 to $9.47.