Following the better-than-expected fourth-quarter fiscal 2013
results and an impressive fiscal 2014 outlook, shares of
Rite Aid Corp
) attained a new 52-week high of $2.48 on Friday, Apr 19, before
closing at $2.46. Moreover, this Zacks Rank #2 (Buy) drugstore
chain operator beat its previous 52-week high of $2.33 and
generated a year-to-date return of 75.7%.
Average volume of shares traded over the last 3 months came in
at approximately 14,719K. Currently, the stock which has a market
capitalization of $2.19 billion, trades at a forward P/E of
18.6x, significantly higher than the peer group average of
Driven by the introduction of high margin generic drugs and
increased prescriptions at its pharmacy counters, Rite Aid posted
a quarterly profit for the second consecutive quarter and a
first-yearly profit since 2007.
Rite Aid's fourth-quarter fiscal 2013 adjusted earnings of 21
cents per share fared better than both the year-ago quarter's
loss of 17 cents as well as the Zacks Consensus Estimate of
break-even earnings. Moreover, after reporting losses for 6
consecutive fiscals, the company posted adjusted earnings of 24
cents per share in fiscal 2013, significantly surpassing the
Zacks Consensus Estimate of a loss of 41 cents.
The positive earnings in the quarter and fiscal 2013 also
benefited from the rise in adjusted EBITDA and lower LIFO
charges. Rite Aid, which competes with
China Nepstar Chain Drugstore Ltd
), continues to benefit from 9 straight quarters of improved
adjusted EBITDA and same store prescription count.
Rite Aid reported adjusted EBITDA of $340.3 million, up 24.0%
from $274.3 million in the prior-year quarter. As a percentage of
sales, it improved 150 bps to 5.3%, gaining from higher pharmacy
gross margin driven by new generic introductions and strong
prescription count growth, partially offset by one lesser
Further, Rite Aid, which trails only
CVS Caremark Corp.
) in size, anticipates its fiscal 2014 adjusted EBITDA to range
from $1.075 to $1.175 billion. Moreover, net income is expected
in the range of $45.0-$200.0 million or earnings per share of 4
cents to 20 cents.
Following this, the Zacks Consensus Estimate for fiscal 2014
jumped over fourfold to 13 cents per share from 3 cents, in the
last 30 days. Moreover, during the same time frame, estimates for
fiscal 2015 have surged 50.0% to 9 cents per share from 6 cents
as forecasted earlier.
CVS CAREMARK CP (CVS): Free Stock Analysis
CHINA NEPSTAR (NPD): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
WALGREEN CO (WAG): Free Stock Analysis Report
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