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Rite Aid Corporation Message Board

  • thesnooptonydog thesnooptonydog Apr 12, 2013 9:10 AM Flag

    Finally time to compare P/E ratios of WAG, CVS, RAD


    RAD's P/E is based on 13c / share earnings. By management's own (conservative) view - can make 20c/share this year. If RAD rises to P/E of its peers AND earns 20c/share then price = $3.80.

    It's that simple now that 2 positive quarters under its belt. RAD is undervalued.

    And it plans to grow revs this year with remodels. Plans to cut costs by continuing to close stores that lose money - they still have some to close.

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    • They said $.04 at the low end to $.20 at the high. They provided no information on whether or not they would have a large accounting adjustment to inventories again.

    • I'm glad you are enjoying the ride with RAD. I made a little here too before selling at $2.08 yesterday. I trade RAD from time to time, but I wouldn't consider investing in the company just yet. Two profitable quarters is a huge improvement over the past 10 years, but they don't establish a trend. Those profitable quarters were largely due to profits on a handful of expired brand pharmaceuticals. As those drugs become more competitively priced, and that process has already begun, RAD will suffer. They still don't have a model for profitability under more normalized conditions, although I agree the divestment of unprofitable stores is a step in the right direction. RAD cannot compete successfully with WAG and CVS. They don't deserve a p/e above 10 in my opinion. While management suggests they could earn as much as 20 cents a share in the coming year, I suggest that 10-12 cents is more realistic. I hope the day comes that RAD succeeds in becoming a legitimate competitor in the industry. I'm sure you are not interested in my advice but I can't help but honestly recommend that those who have seen significant gains with RAD consider taking some profits before the next earnings report. Good luck.

      • 3 Replies to henleywm
      • Those who held for the past 2 earnings reports were richly rewarded. I agree that next earnings may be a test of the new market expectation for Rite Aid.

        There are still generics to hit the market. Lidoderm is just one of many. Speaking of generics, don't forget that the mother of all generics has yet to hit the market. You know of which I speak...... Viagra. Cialis hits next year. When those hit, we're looking at potential social upheaval in the USA.

        The vaccine revenue growth stream is just beginning. MD offices just don't want to do it. RAD will happily step in and do it for them. RAD is trying to get revenue from medication therapy management. That is still to be seen but they are at the forefront.

      • doncassel Apr 12, 2013 10:23 AM Flag

        Hey Jackass, the trend has been going on for 5 years, improvement almost every quarter.

        Who are you trying to BS? I'm not an Acehole, ya know?


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