Credit Suisse Ups Rite Aid to Outperform
Credit Suisse upgraded Rite Aid (RAD) to outperform from underperform, explaining that a solid turnaround in the company's business could mean upside in the share price.
Analyst Edward Kelly says his analysis indicates that downside is limited in the stock price. He views the risk/reward as extremely attractive. He estimates recovery in Earning Before Interest and Taxes margin to 3.5% from 2.5% currently could result in a $9 to 10 stock price. He's encouraged by Rite Aid's recent pharmacy sales trends and says 2006 guidance appears somewhat conservative. He raises his $3 stock price target to $5.50.