Boston, MA 07/03/2014 (wallstreetpr) – Rite Aid Corporation (NYSE:RAD), a leading retail drugstore in the U.S., saw its shares up nearly 1 percent yesterday despite receiving a downgrade note from Zacks.
The company sells prescription drugs as well as a range of other products that fall under its front end products category.
The stock was downgraded by analysts Zacks who cited the sharp decline in its bottom line in the most recent reporting. Zacks reduced the stock to “Neutral” from “Outperform.” The analysts have a price target of $7.50 per share on the stock. The price target suggests nearly 5 percent premium on the prevailing price of the stock.
Although Zacks downgraded the stock of Rite Aid (NYSE:RAD), they appreciated the measures that the company is taking to boost its customer bases and top line. Among the efforts, the company making to boost performance is remodeling of wellness stores and customer loyalty program. The company has also entered arrangements to help it lower the purchase cost of generic drugs so as to boost its bottom line.
In addition to Zacks, several other rating firms have recently commented on the stock of Rite Aid Corporation (NYSE:RAD). Goldman Sachs Group Inc (NYSE:GS) with a “Buy” rating and Credit Suisse with an “Outperform” rating and $8.50 price target, which is the most optimistic among the recent comments. As such, the stock carries a consensus “Buy” rating and average price target of $7.63 per share.
Rite Aid Corporation (NYSE:RAD) missed consensus earnings estimates in the most recent quarter. The company reported EPS of $0.04 against the consensus estimate of $0.05. As if that was not enough, EPS dropped from $0.09 realized in the same quarter a year earlier.
In addition to earnings miss, Rite Aid Corporation (NYSE:RAD) was also recently hit with a fine of nearly $500,000 to settle claims that the company failed to company with the California rules that require it to offer consultations to customers with new prescriptions.