Research Alert: CFRA Keeps Hold Opinion On Shares Of Rite Aid Corporation

11:05AM ET 9/23/2021 MT Newswires
CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

RAD posts F2Q (Aug-Q) adj-EBITDA of $106M, $16M below our estimate but $9M above consensus. RAD raises its FY 22 (Feb.) adj-EBITDA guidance range by $20M to $460M-$500M; however, this is purely driven by Covid-19 vaccine benefits as opposed to incremental strength in its base business. We lower our 12-month target to $16 from $19, 7.5x our FY 22 adj-EBITDA estimate of $486M (lowered from $507M). We lower our FY 22 EPS estimate to ($0.68) from $0.08 and FY 23's to $0.06 from $0.78. While RAD is progressing on its transformation strategy (e.g., recent debt restructuring/paydowns), we think it is taking longer than investors had hoped. In addition, the next few quarters look challenging given less vaccine benefits, rising cost pressures, and labor challenges within Elixir and its retail business. In addition, we're expecting another weak season for cough, cold, and flu sales, acute prescription sales, and flu immunizations. We maintain a Hold, however, as we believe RAD's valuation reflects these risks.