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Rite Aid Corporation Message Board

  • sempar_grumpy sempar_grumpy Sep 16, 2013 12:54 PM Flag

    Rite Aid is expected to report a loss of $0.04 per share on revenue of $6.27 billion,

    compared to last year’s loss of $0.05 on revenue of $6.23 billion.

    J.P. Morgan gave Rite Aid a Neutral rating this week and was optimistic about the company in the long run, but cited the economy and potential reimbursement pressure as obstacles to success in the near term.

    “Investor focus remains on execution, and whether the company can continue to drive sustainable improvement in the same store sales trend and deliver the expected EBITDA contribution from ongoing restructuring and operational improvement initiatives. While we believe that the company could be successful in driving a turnaround over the longer term (possibly with the aid of some store divestitures to free up capital to invest in the store base), we believe the near term could continue to be bumpy due to the impact of the economy (which has partly contributed to weak same store sales trends in the past), potential reimbursement pressure, and the considerable amount of work to be done on executing the strategic plan.”

    The analyst team at Goldman Sachs also gave the stock a Neutral rating at the beginning of August and adjusted their earnings forecast to reflect improved same-store sales expectations.

    “We raise our 2Q13, 2013, 2014, and 2015 adjusted EBITDA estimates modestly on improved pharmacy same-store sales expectations. Our 2Q13 adjusted EBITDA estimate goes to $278mn from $269mn; 2013 goes to $1,120mn from $1,195mn; 2014 goes to $1,335mn from $1,320mn, and 2015 goes to $1,360mn from $1,345mn.”

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