Rite Aid $RAD Breaks Below Support, Deutsche Bank Lowers Price Target

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  • Reading time:6 mins read
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Rite Aid $RAD fell -6% in early trading on October 3, 2022, on news Deutsche Bank lowers its price target to $3.

Rite Aid price target lowered to $3 from $4 at Deutsche Bank

On October 3, 2022, Deutsche Bank analyst George Hill lowered his price target on Rite Aid to $3 from $4 and kept a Sell rating on the shares. Rite Aid reported fiscal Q2 results where the company’s core pharmacy business continues to erode, and improvements in the pharmacy benefit management segment may prove short-lived as the company experiences lower membership in 2023 because of client loss.

Rite Aid removed from TAP Outperform list at Evercore ISI, target cut to $4.50

On September 30, 2022, Evercore ISI analyst Elizabeth Anderson lowered the firm’s price target on Rite Aid to $4.50 from $7 and kept an Underperform rating on the shares. Evercore ISI is removing the stock from its “TAP Outperform” list. Evercore acknowledged they had misjudged the pacing of the improvements in the core business ahead of the company, reporting Q2 results. The firm’s new estimates are more conservative and they are concerned about the deteriorating core results in the Retail business.

Rite Aid stock dives on earnings miss, trimmed outlook

Rite Aid stock dives on earnings miss, trimmed outlook

RAD Alert: Monsey Firm of Wohl & Fruchter LLP Investigating Rite Aid Corporation for Potential Securities Law Violations

On September 29, 2022, the law firm of Wohl & Fruchter LLP is investigating whether Rite Aid Corporation (NYSE: RAD) has violated federal securities laws. If you suffered losses as a result of today’s sharp drop in the price of RAD, and have questions about your legal rights, please contact us at the following link to discuss your options at no charge:

Alternatively, you may contact us by phone at 866-833-6245, or via email at [email protected]

Why is there an investigation?

Elixir, is a fully owned subsidiary of Rite Aid that offers pharmacy benefit management (PBM) services, Medicare-approved prescription drug plans, mail and specialty pharmacy solutions, and prescription discount programs to millions of members nationwide.

On June 10, 2022, Rite Aid filed a letter with the Securities and Exchange Commission (“SEC”) from Rite Aid’s President and Chief Executive Officer, Heyward Donigan, stating among other things that “[o]ur Elixir account and sales teams are gaining momentum, and we are executing more efficiently by consolidating functions. And the market is noticing—we have added 34,000 individuals covered by Elixir’s PBM services since January 1, 2022, with many more in the pipeline. And we just won the renewal of our largest health plan client in a very competitive bidding process.”

Subsequently, on an earnings call held on June 23, 2022, Donigan advised analysts concerning Elixir that “the selling season is still in progress, and we’ve got close to 1 million lives remaining in the pipeline for January 1, 2023.” Elixir’s Chief Operating Officer, Chris DuPaul, added that “we are still expecting to have the strongest selling season that we’ve had in several years at Elixir. And so we feel really good about where our life count is headed.”

On September 29, 2022, however, Rite Aid announced a $252.2 million charge for the impairment of goodwill related to the Elixir subsidiary. On an earnings call held later in the day, Rite Aid’s Chief Financial Officer, Matt Schroeder, explained that the large impairment charge was triggered by a change in Rite Aid’s estimate of lives covered by Elixir for 2023 based on the latest selling season.

Rite Aid $RAD Stock Chart Technical Analysis

Rite Aid $RAD stock is in a technical strong downtrend. Long-term indicators support a continuation of the downtrend. Rite Aid stock is in oversold territory, opening up the possibility of a short-term bounce or trend reversal. The stock has recently broken down below the Symmetrical Triangle pattern to continue its downtrend.

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