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 53th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 23.17%. As for the metrics that stood out in our discounted cash flow analysis of Rite Aid Corp, consider:
Interest coverage, a measure of earnings relative to interest payments, is 0.72 -- which is good for besting only 22.93% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
The company's compound free cash flow growth rate over the past 5.82 years comes in at -0.04%; that's greater than only 22.44% of US stocks we're applying DCF forecasting to.
11% of the company's capital comes from equity, which is greater than just 4.15% 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 HELE, KR, ANDE, BUD, and DL.
Coronavirus has made good news few and far between. In the midst of so much global anxiety, it's nice to reflect on the silver linings culminating from this catastrophe. To me, that glimmer of positive news is people taking better care of themselves going forward.
U.S. pharmacy chains are preparing a big push for flu vaccinations when the season kicks off in October, hoping to curb tens of thousands of serious cases that could coincide with a second wave of coronavirus infections. CVS Health Corp, one of the largest U.S. pharmacies, said it is working to ensure it has vaccine doses available for an anticipated surge in customers seeking shots to protect against seasonal influenza. Rival chain Rite Aid Corp has ordered 40 percent more vaccine doses to meet the expected demand.