Rite Aid Corp (fka RADCQ)

[Greencake]

Out of the Gate: Rite Aid Shares Rise

(Nice HOLD TM ; )




Tuesday February 26, 10:17 am ET
Rite Aid Shares Rise After Analyst Upgrades, Saying Stock Reflects Company's Risk and Reward


NEW YORK (AP) -- Shares of Rite Aid Corp. jumped in Tuesday morning trading after an analyst upgraded the pharmacy chain, saying a recent stock drop makes the company's risk and reward profile more favorable.
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Shares rose 26 cents, or 10 percent, to $2.87 after the opening bell. The stock has lost 32.5 percent of its value since Dec. 11.

JPMorgan analyst Lisa C. Gill moved her rating to "Overweight" from "Neutral."

Data from the Centers from Disease Control and Prevention indicates the number of states with widespread instances of the flu is sharply up over last year.

"This should drive an acceleration on both the pharmacy side (prescription drugs) and the front end (over-the-counter cough and cold products)," she said in a client note.

Recently, Rite Aid has been able to narrow the same-store sales gap between it and competiors, including CVS Caremark Corp. and Walgreen Co., and margins have the potential to do so as well, she said.

While Rite Aid shares should trade below those of its competitors given "uncertainties and concerns," the current low price is "excessive," she said.