Rite Aid Corporation (NYSE:RAD) spent a very quiet session and finally ended with a minor gain of 0.60%. The very mute volume of 20 million against the daily average of 40 million marked the lack of volatility pretty well. The stock is 7.39% off of its 52 week high but the bears can’t claim any great victory yet. It has just been upgraded to “buy” with a raised price target of $10 from the earlier $9 by Deutsche Bank but that may be limit of the upmove of the stock in the short term.
Rite Aid Corporation (NYSE:RAD) had announced the fourth quarter last week. The revenue at $6.8 billion reflects a 3.8% increase on a y-o-y basis and met the consensus perfectly. The full year revenue came at $26.5 billion, increasing by 3.9% on a yearly basis. The earnings for the quarter came at $1.835 billion or $1.79 per diluted share, implying a huge jump from the same quarter in 2013 figure of $55.4 million or $0.06 per share. Considering the much larger tax benefit than the company reported, the earnings on a pre-tax basis comes to $119.1 million or $0.12 per diluted share, still beating the market expectation of $0.07 by a good margin. For the full year of 2015, keeping the huge tax benefit aside, the pre-tax income came at $426.8 billion or $0.42 per diluted share against the fiscal 2014 figure of $250.2 million or $0.23 per diluted share.
Technically, the stock is in a firm uptrend but another 20% rally from the current levels would take it to very strong historical supply zone around $10 levels. Any further continuation of the immediate correction should get support from the trendline around $7.50-70 levels but the intermediate support around $6.70 levels must be considered too in case of a deeper correction.