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Rite Aid (RAD) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Rite Aid (RAD) closed at $8.08 in the latest trading session, marking a -0.25% move from the prior day. This move lagged the S&P 500's daily loss of 0.11%. Elsewhere, the Dow lost 0.1%, while the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the drugstore chain had lost 15.98% over the past month, lagging the Retail-Wholesale sector's gain of 0.63% and the S&P 500's gain of 1.62% in that time.

Investors will be hoping for strength from RAD as it approaches its next earnings release, which is expected to be December 19, 2019. On that day, RAD is projected to report earnings of $0.03 per share, which would represent a year-over-year decline of 85%. Our most recent consensus estimate is calling for quarterly revenue of $5.43 billion, down 0.41% from the year-ago period.

Investors should also note any recent changes to analyst estimates for RAD. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. RAD is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that RAD has a Forward P/E ratio of 67.5 right now. This represents a premium compared to its industry's average Forward P/E of 10.67.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Zacks Investment Research