Rite Aid (RAD) Sinks as Drugstore Chain Trims FY15 Guidance

Rite Aid Corporation (RAD) lost $1.32 to $5.33 in mid-day trading today after the co. lowered its earnings outlook for fiscal 2015. Approximately 135,910,851 RAD shares have already changed hands, compared to the stock’s average daily volume of 25,803,500.

Based upon current estimates for reimbursement rates and anticipated lower profitability from new generics and generic drugs that recently lost exclusivity, the company said is expecting decreases in pharmacy margin in the second half of Fiscal 2015 as compared to its prior estimates and therefore is lowering its guidance for Adjusted EBITDA, net income and net income per diluted share. Net income is expected to be between $223M and $333M and income per diluted share between $0.22 and $0.33. The company also said is narrowing guidance for sales and same store sales. Sales are expected to be between $26B and $26.3B and same store sales to range from an increase of 3% to an increase of 4% over Fiscal 2014. Capital expenditures are expected to be approximately $525M.

On valuation-measures, shares of Rite Aid have a trailing-12 and forward P/E of 23.92 and 11.75, respectively. P/E to growth ratio is 0.47, while t-12 profit margin is 0.78%. EPS registers at 0.23. The company has a market cap of 5.21B and a median Wall Street price target of $8.50 with a high target of $9.50.

On trading-measure, RAD has a beta of 1.87 and a short float of 4.19 % . In the past 52 weeks, shares of the retail drugstores chain company have traded between a low of $3.68 and a high of $8.62 with its 50-day MA and 200-day MA located at $6.38 and $6.99 levels, respectively.

RAD currently prints a one year return of about 45% and a year-to-date return of around 6%.

The chart below shows where the equity has traded over the last 52 weeks, with the 50-day and 200-day MAs included.

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