Rite Aid Corp RAD shares are trading significantly lower Thursday after Deutsche Bank analyst George Hill downgraded the stock from a Hold rating to a Sell rating and lowered the price target from $16 to $1.
According to reports, Hill believes Rite Aid is in decline and that the company may be running low on cash. He notes that the pandemic may have had lasting impacts on retail pharmacies.
The Deutsche Bank analyst believes Rite Aid will struggle to meet estimates, which is why the downgrade comes ahead of earnings. Furthermore, full-year 2023 EBITDA guidance will be important. If the number comes in below $400 million, Hill argues the company will no longer be in a position to generate meaningful returns for shareholders.
Rite Aid is scheduled to report fourth-quarter financial results before the market opens on April 14.
See Also: Why Conagra Brands Stock Is Trading Lower
RAD 52-Week Range: $8.11 - $23.02
According to data from Benzinga Pro, the stock was down 17.1% at $7.01 at time of publication.
Photo: courtesy of Rite Aid.
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