Rite Aid Corporation operates a chain of retail drugstores in the United States. The company sells prescription drugs and a range of other merchandise, including over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise, and other every day and convenience products. The company was founded in 1927 and is based in Camp Hill, Pennsylvania.
RAD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Rite Aid Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Rite Aid Corp ranked in the 28th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 59.83%. In terms of the factors that were most noteworthy in this DCF analysis for RAD, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 0.97 -- which is good for besting just 23.91% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
Its compound free cash flow growth rate, as measured over the past 5.75 years, is -0.14% -- higher than only 11.27% of stocks in our DCF forecasting set.
8% of the company's capital comes from equity, which is greater than merely 2.28% of stocks in our cash flow based forecasting set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RAD, try HRL, PFGC, PG, MGPI, and YEWB.
I have written quite a bit about CVS Health (CVS) and its innovating into a one-of-a-kind business. In articles and numerous comments to others, the value case has been made rather clear. However the debt picture continues to get better and better, or maybe I should say clearer and clearer....
CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid (NYSE: RAD) announced the kick-off of the company’s annual Pharmacy Champions program, which the drug store chain is rebranding “Pharmacy Heroes” to acknowledge the heroism and remarkable service provided by Rite Aid’s pharmacy team in the face of the COVID-19 pandemic. Held throughout October during American Pharmacists Month, the Pharmacy Hero Contest gives Rite Aid customers the opportunity to honor any pharmacist or pharmacy technician who has gone
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