RAD - Embedded Expectations Analysis - 2020 06 19
Rite Aid Corporation (RAD:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 30.9x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about reimbursement rate pressure, their digital growth strategy, and sales growthSpecifically, management may be overstating the potential of their digital growth strategy, their focus on serving the community, and their ability to scale coronavirus testing sites. Furthermore, they may lack confidence in their ability to maintain their Q4 performance, extend pharmacist engagement through service delivery, and offset reimbursement rate pressure through generic drug savings. Moreover, they may lack confidence in their ability to sustain Med D business growth, revitalize their retail and digital experience, and maintain strong PBM commercial selling. Finally, they may be concerned about changes in in-store traffic, their decision to restrict online opportunities to wellness+ members, and the sustainability of online demand and front-end market share gains
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.