Boston, MA 10/06/2014 (wallstreetpr) – Rite Aid Corporation (NYSE:RAD) reversed the course of its stock price following its encouraging September sales figures. Analysts have weighed in on the stock with re-affirmation of bullish outlook on the company. Analysts were wary of the retail segment because of the softness in consumer spending and other market challenges.
Strong sales growth in September
Investors have generally been cautious when dealing with retail and drugstore stocks. Stocks such as Rite Aid Corporation (NYSE:RAD) and Walgreen Company (NYSE:WAG), for instance. However, when September sales report came out, it was clear that investors were pleasantly surprised. Rite Aid Corporation (NYSE:RAD) reported stronger comparable store sales than analysts had anticipated. It reported 6.3% in comparable pharmacy sales during the month of September, compared to estimates of 4.5% for the month. As if that was not enough, the drugstore operator said scripts increased by 4.1% in the month, being the highest growth ever attained since 2012-13 season.
Bullish outlook re-affirmed
All in all, Rite Aid Corporation (NYSE:RAD) said comp sales in September were up 5.1%, ahead of the estimate of 3-4% for that month. The achievement in comp sales was enough to get analysts feeling otherwise about the stock. Analysts at Credit Suisse wasted no time to reiterate an “outperform” rating on the stock and issued a target price of $7 on it. That was not all as other rating firms including Raymond James, Guggenheim Securities LLC and Deutsche Bank (DB) also maintained their bullish outlook on RAD. The stock carries consensus “buy” rating and average target price of $6.91. Shares of have risen 7% over the past 12 months.
Rite Aid Corporation (NYSE:RAD) last posted earnings on September 18, during which it reported EPS of $0.13 per share, ahead of the consensus estimate of $0.06. It generated revenue of $6.50 billion for the quarter, which was 3.9% improvement from the like quarter a year earlier. Looking at the way things are panning out for the company it can be said that the turnaround is on track.