Stock Alert for Rite Aid Corp. (RAD)
  • Stock Alert for Rite Aid Corp. (RAD)
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    Stock Alert for Rite Aid Corp. (RAD)

    Rite Aid Corp. (RAD) is a retail drugstore chain in the United States, operating in 31 states across the country and the District of Columbia. In its stores, RAD sells prescription drugs and front end products, which include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, beverages, convenience foods, greeting cards, seasonal merchandise, and various other everyday and convenience products, as well as photo processing products. The Company sells its products under the Rite Aid brand. It offers its products to customers covered by third party payors, such as insurance companies, prescription benefit management companies, government agencies, private employers or other managed care providers. It has a strategic alliance with GNC to operate GNC stores within Rite Aid stores.  As of the fiscal year ended February 26, 2011, RAD operated 4,714 stores.

    RAD was incorporated in 1968 and is headquartered in Camp Hill, Pennsylvania.

    Share Statistics (07-Apr-11) FY

    2009

    FY

    2010

    %

    Chg

    Q4

    2009

    Q4

    2010

    %

    Chg

    Symbol RAD Revenue, $Mn 26.29B 25.67B -2.4% 6.35B 6.20B -2.4%
    Current price $1.08 Gross marg. 26.8% 26.6% -0.7% 26.5% 26.5% 0.0%
    52wk Range: $0.86-$1.49 Oper. margin -1.9% -1.3%
    Avg Vol (3m): 7,750,880 Net margin -11.1% -2.0% -82.0% -1.3% -1.3% 0.0%
    Market Cap. 961.46M
    Shares Outstanding 890.24M EPS, $ -1.80 -0.43 -76.1% -0.07 -0.08 14.3%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of RAD gained Thursday after drugstore chain released fourth-quarter figures showing a narrowed loss and an increase in its adjusted EBITDA. The Company attributed the results to fewer charges, lower overhead costs and improving same-store sales, offset by higher lease termination and impairment charges. It also cited growth of its wellness+ loyalty program, which now has more than 36 million members.  RAD’s fourth-quarter net loss of $205.7 million, or $0.24 per share, was in line with analysts’ expectations.

    Quarterly revenues came in at $6.5 billion, flat to last year’s fourth-quarter revenues of $6.5 billion.  The Company reported an increase in sales at stores open at least a year, consisting of a 1% increase in the front end and a 0.8% increase in the pharmacy. It reported that prescription sales accounted for 66.7% of total drugstore sales and third-party prescription revenue was 96.3% of pharmacy sales.

    For the current fiscal year, the Company expects to post a net loss between $370 million and $560 million, or a loss of $0.42 to $0.64 per diluted share. This is despite an expected rise in sales. RAD expects sales to be between $25.7 billion and $26.1 billion in fiscal 2012 with same stores sales expected to range from an increase of 0.5% to an increase of 2.0% over fiscal 2011.  According to the Company, its outlook fiscal 2012 is based on current same store sales trends, a challenging reimbursement rate environment and the impact of continued investments the Company plans to make in its customer loyalty program and other initiatives to grow sales. The Company expected capital expenditures to be about $300 million, which includes significantly increasing the number of store remodels and prescription file buys.

    For the fiscal year ended February 26, 2011, RAD’s stores in operation totaled 4,714. The Company opened three new stores, relocated 28 stores, remodeled 19 stores and closed 69 stores.

    RAD jumped 2.36% to close Thursday at $1.09. Approximately 18.04 million shares have traded hands during the session, versus the 10-day average volume of 6 million.  In the past 52 weeks, shares of RAD have traded between a low of $0.86 and a high of $1.49. RAD is currently below its 50-day moving average of $1.17 and above its 200-day moving average of $1.03. At Thursday’s closing market price, the market capitalization of the Company stands at $965.91 million and it has 890.24 million outstanding shares.

    Visit RAD at www.riteaid.com

    Source: www.riteaid.com


    Financial Strength (07-Apr-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.49 0.67 0.63 0.67
    Current Ratio (MRQ) 1.86 1.34 0.87 0.99
    LT Debt to Equity (MRQ) 17.34 21.29 115.14
    Total Debt to Equity (MRQ) 27.65 30.63 164.59
    Interest Coverage (TTM) -3.71 2.47 0.60 16.81

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among seven polled investment analysts. Against the Rite Aid Corp company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 1 0 4 1 1 0
    4 weeks ago 1 0 5 1 1 0
    2 months ago 1 0 5 1 1 0
    3 months ago 2 0 5 1 1 0
    Last year 2 0 4 1 0 0

    The four analysts offering 12-month price targets for RAD have a median target of 1.35, with a high estimate of 4.00 and a low estimate of 1.00. The median estimate represents a 28.57% increase from the last price of 1.05.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending May-11 3 6,373.48 6,439.41 6,324.60 6,440.75
    Quarter Ending Aug-11 3 6,142.06 6,196.49 6,111.90 6,329.95
    Year Ending Feb-11 8 25,163.70 25,312.00 25,039.00 25,466.70
    Year Ending Feb-12 8 25,132.40 25,692.00 24,857.70 25,834.00
    EARNINGS (per share)
    Quarter Ending May-11 5 -0.09 -0.08 -0.11 -0.10
    Quarter Ending Aug-11 5 -0.16 -0.13 -0.19 -0.12
    Year Ending Feb-11 8 -0.62 -0.53 -0.66 -0.52
    Year Ending Feb-12 8 -0.47 -0.39 -0.62 -0.38

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=RAD.N

    Technical Analysis

    Source: http://stockcharts.com

    On Wednesday, RAD closed above its 20-day moving average. This is generally considered to be an indication of a bullish trend.

    RAD is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    RAD’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Apr07-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    CVS Caremark Corp CVS 35.47 48.53B 12.81 11.30 0.45 0.43
    Walgreen Co. WAG 41.33 37.99B 15.84 13.82 0.53 0.50
    Wal-Mart Stores Inc. WMT 53.00 185.03B 11.94 10.86 0.42 0.40
    Drug Stores Median
    Rite Aid Corp. RAD 1.08 961.46M n/a n/a 0.04 0.04

    Source: Thomson Financial

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