Rite Aid’s shares continue the slide after 3Q17 results
As we discussed throughout this series, Rite Aid (RAD) reported better-than-expected quarterly profits on January 3. However, the third quarter results couldn’t stop the slide in the company’s stock price. The stock was down more than 6% on January 4 before finally closing 1.4% lower than the previous day’s closing price. The company lost another 2.4% on the next trading day.
Discussing the performance of Rite Aid’s stock in 2017
Rite Aid’s investors faced their worst nightmare in 2017. The stock lost more than 75% of its value. Most of the damage was done after June, when Walgreens (WBA) finally scrapped its proposal to buy Rite Aid after it didn’t get FTC approval. Rite Aid fell as much as 26.5% after the initial deal was scrapped on June 29. It plunged more than 12% on September 19 after the current agreement of 1,932 stores was announced.
Rite Aid is currently trading at $2.03 (as of January 5). It traded at $8.18 at the beginning of 2017.
Drugstore competitors CVS Health (CVS) and Walgreens also closed the year in the red. While CVS Health was down 8%, Walgreens plunged around 12%. Most of the decline in the stock price resulted from growing pessimism in the retail pharmacy sector after the news of Amazon’s potential entry into the drugstore space.
See the next part of this series to learn about Wall Street’s recommendations on the company and any recent rating changes.
Investors looking for exposure to Rite Aid through ETFs can choose to invest in First Trust Consumer Staples AlphaDEX Fund (FXG), which invests 1.9% of its portfolio in the company.