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Rite Aid (RAD) Stock Jumps 7.4%: Will It Continue to Soar?

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Rite Aid RAD shares rallied 7.4% in the last trading session to close at $7.51. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 26% loss over the past four weeks.

Rite Aid has been gaining from accelerated COVID-19 vaccine program, the expansion of delivery services as well as strength in PBM business driven by its RxEvolution strategy. Moreover, the company recently announced to offer second COVID-19 booster of Pfizer and Moderna for people aged 50 and above as well as immunocompromised individuals aged 12 and above. It also remains focused on providing lower healthcare costs, better customer engagement and personalized services.

This drugstore chain is expected to post quarterly loss of $0.57 per share in its upcoming report, which represents a year-over-year change of +26.9%. Revenues are expected to be $5.95 billion, up 0.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Rite Aid, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RAD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Rite Aid belongs to the Zacks Retail - Pharmacies and Drug Stores industry. Another stock from the same industry, Herbalife LTD. HLF, closed the last trading session 1.8% higher at $30.10. Over the past month, HLF has returned -12.5%.

Herbalife LTD.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.87. Compared to the company's year-ago EPS, this represents a change of -38.7%. Herbalife LTD. currently boasts a Zacks Rank of #4 (Sell).


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