Rite Aid Corp

In the Rite Aid–Walgreens merger, Walgreens is paying about 0.6x trailing-12-month revenues and 13.6x trailing-12-month EBITDA.

The primary loan market remained busy with opportunistic issuers coming in to test the investor’s interest for floating interest rate loans.

If you’re a moderate investor invested in high-yield bond mutual funds, you could consider moving some of your assets to investment grade funds (OPIGX).

In October 2015, Walgreens Boots Alliance (WBA) announced its intention to acquire Rite Aid (RAD) for a total enterprise value of $17.2 billion.

Rite Aid (RAD) has a market cap of $8.2 billion. After the fiscal 3Q16 earnings report, Rite Aid fell by 0.25% to close at $7.88 per share as of December 17, 2015.

The Walgreens-Rite Aid merger is a combination of the first and third largest pharmacies in the United States.

The advance retail sales report for April 2015 was on the whole, mixed. The mixed readings in the retail sales report brought about indifferent reactions from markets.

Uncertainty over closing the proposed merger between Walgreens Boots Alliance (WBA) and Rite Aid (RAD) has resulted in a 42.8% fall in RAD stock YTD.

CVS generates close to 70% of its annual sales by offering a full range of pharmacy benefit management services.

Walgreens Boots Alliance (WBA) issued Baa2/BBB rated high-grade bonds worth $6.0 billion through five parts on May 26.

GNC Holdings (GNC) has a market cap of $2.2 billion. GNC rose by 1.6% to close at $26.98 per share on February 11, 2016.

Target has identified four signature categories it’s concentrating on to provide higher store and web traffic and sales: Baby, Style, Wellness, and Kids.

Amazon (AMZN) recently began letting customers use funds in their special healthcare savings account to pay for purchases of eligible products on its marketplace, the company confirmed to CNBC.

Walgreens’s Retail Pharmacy USA division accounted for 76% of fourth-quarter sales and increased 14.4% YoY to $25.5 billion.

CVS Health’s (CVS) better-than-expected second-quarter results managed to please investors.

Amazon’s (AMZN) purchase of PillPack is expected to pose a threat to existing players in the pharmaceutical space.

SuperValu (SVU) announced on March 14 that it’s selling 21 of its 38 Farm Fresh stores to three grocery store chains.

The top three drugstore chains in the US are in the process of forming new associations through mergers and acquisitions to create a more diversified portfolio and protect themselves from the growing online threat.

Wall Street kept its stance unchanged on Rite Aid (RAD) after its third-quarter results. Evercore ISI, however, initiated coverage on the company on January 5 with an “underperform” rating.

As we’ve discussed, Walgreens Boots Alliance (WBA) reported its 1Q18 results on January 4. The company’s top line increased 7.9% YoY (year-over-year) to $30.74 billion.

Walgreens Boots Alliance (WBA) reported its results for 1Q18 on Thursday, January 4. The results relate to the three-month period ending November 30, 2017.

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.

Rite Aid Corporation (RAD) reported third-quarter results on January 3. The company’s adjusted net earnings from continuing operations stood at $1.6 million, or $0.00 per diluted share, compared to $26.8 million or $0.03 per diluted share during the same period last year.

Rite Aid (RAD) reported its 3Q17 results after the market closed on January 3. The company’s top line plunged 5.6% YoY (year-over-year) to $5.35 billion (excluding discontinued operations).

Rite Aid Corporation (RAD) reported results for 3Q17 on Wednesday, January 3. The results relate to the three-month period ending December 2, 2017.

CVS Health (CVS), America’s largest pharmacy chain, announced a $69 billion deal to purchase Aetna (AET), the country’s third-largest insurance company, on December 3, 2017.

PetMed Express (PETS) stock has risen 77% in the last one-year period, reaching a high of $50.06 on July 26, 2017.

In 2017, the PetMed Express (PETS) website attracted ~32.0 million visitors, ~8.0% of whom placed an order for a conversion ratio of ~25.0%.

Of the five analysts covering PetMed Express (PETS) in October 2017, two gave it “strong buy” ratings, two gave it “hold” ratings, and one gave it a “sell” rating. Its target price was $43.75.

With trailing 12-month sales of $181 billion, CVS Health is a pharmacy colossus. However, its focus seems to be on becoming more than just a retail pharmacy chain.

Walgreens Boots Alliance’s strong 4Q17 results were received well by the market. The company’s stock price rose 3% and closed at $69.36 on October 25.

Walgreens Boots Alliance (WBA) is slated to release its fiscal 4Q17 earnings on October 25. WBA’s total sales are expected to reach $29.6 billion, a 4.6% increase over its fiscal 4Q16 sales.

The US drugstore market is dominated by two major players—CVS Health (CVS) and Walgreens Boots Alliance (WBA). CVS and WBA accounted for ~29% of the country’s prescription dispensing revenues in 2016.

Three months after its Whole Foods acquisition, Amazon is making waves again with rumors that it is eying the prescription drug distribution business.

Rite Aid’s shareholders have been the real losers from the delay and eventual termination of the deal between Rite Aid (RAD) and Walgreens Boots Alliance (WBA) in October 2015.

According to Bloomberg, Walgreens Boots Alliance (WBA) and Rite Aid (RAD) have moved toward closing their long-awaited acquisition deal.

Rite Aid’s profitability has worsened over the years. Its gross margin has fallen from 29.0% in fiscal 2013 to just 22.6% in the first quarter of the current fiscal year.

Rite Aid (RAD) is slated to release its fiscal 2Q17 results on Thursday, September 28, 2017. Its EPS (earnings per share) is projected to fall to zero from last year’s $0.01.

As of March 31, 2017, the top selling in billionaire investor David Einhorn’s portfolio included Apple, Time Warner, Rite Aid, and AerCap Holdings.

Walgreens is covered by 25 Wall Street analysts. The company has received a rating of 2 on a scale of 1 (strong buy) to 5 (sell). It has 72% “buy” and 28% “hold” recommendations and no “sell” recommendations.

WBA’s CEO, Stefano Pessina, said that he remains positive about the Rite Aid deal, which has been waiting for FTC approval for more than a year.

The merger of Walgreens and Rite Aid would join the second- and third-largest drugstore chains and thus significantly reduce competition.

Walgreens Boots Alliance (WBA) and Rite Aid (RAD) have amended their merger agreement. WBA will now pay less for each RAD share, depending on the number of locations it must divest.

In the last couple of quarters, Walgreens Boots Alliance’s (WBA) fiscal 1Q17 top line was negatively affected by currency headwinds, falling 1.8% YoY.

Let’s wrap up this series on Walgreens (WBA) with a brief SWOT (strengths, weaknesses, opportunities, and threats) to gauge the company’s standing.

Walgreens’s deal with Rite Aid is currently awaiting the Federal Trade Commission’s (or FTC) approval. The FTC has asked Walgreens to close or sell ~650 stores.

GNC’s peers have outperformed GNC Holdings based on PE and PBV ratios. But GNC has mostly outperformed its peers based on PS ratios.

GNC Holdings (GNC) reported 3Q16 revenue of $628.0 million, a fall of 8.1%. Its gross profit margin and operating margin fell 240 bps and 170 bps, respectively.

GNC Holdings has a market cap of $1.5 billion. It fell by 25.5% and closed at $20.28 per share on July 28, 2016. It reported 2Q16 revenue of $673.2 million.

Walgreens (WBA) operates close to 8,200 pharmacies in the US. It is closely followed by CVS Health (CVS), which operates slightly fewer than 8,000 pharmacies.

Walgreens Boots Alliance’s (WBA) sales rose 48.5% YoY (year-over-year) to $29 billion in 1Q16. The increase was largely driven by the consolidation of Alliance Boots’ operations.

GNC Holdings (GNC) reported revenue of $618.2 million, a rise of 1.8% over the corresponding period last year.

In this section, we’ll look at Walgreens Boots Alliance’s (WBA) current strengths and weaknesses.

In this part, we’ll discuss the company’s upcoming opportunities and potential threats.

Walgreen Boots Alliance’s (WBA) common stock trades on the NASDAQ under the symbol “WBA.”

Walgreens Boots Alliance (WBA) and CVS Health (CVS) largely dominate the US drug store market.

US drugstores typically generate revenues by selling prescription drugs, over-the-counter medications, health and beauty products, and general merchandise.

Headquartered in Deerfield, Illinois, Walgreens Boots Alliance (WBA) is the second-largest pharmacy retail chain in the United States.

Walgreens Boots Alliance’s (WBA) Retail Pharmacy USA division can be broken down into pharmacy and retail components.

The Retail Pharmacy USA division is Walgreens Boots Alliance’s (WBA) largest revenue generator.

Under its Retail Pharmacy International division, Walgreens Boots Alliance operates pharmacy-led health and beauty retail businesses in eight countries.

The MAE (material adverse effect) clause lays out the circumstances under which Walgreens Boots Alliance (WBA) can back out of its merger with Rite Aid (RAD).

Rite Aid is the third largest retail drugstore chain in the United States based on both revenues and number of stores.

The Rite Aid–Walgreens merger is expected to be accretive to Walgreens Boots Alliance’s adjusted earnings per share in the first year after completion.

The US pharmacy and drugstore industry is worth $263 billion in total sales and $10.3 billion in profit. Walgreens and Rite Aid are ranked second and third.

This is an all-cash deal. It means that Walgreens proposed to buy Rite Aid by paying $9.4 billion in cash. The payment won’t include any stock component.

Walgreens acquired drugstore operator Alliance Boots in December 2014. With the acquisition, Walgreens entered into Europe, the Middle East, and Asia.

Rite Aid’s peers outperformed it based on gross profit, diluted EPS, and the PE ratio. The ETFs outperformed it based on the PE ratio and price movement.

CVS Health’s stock price slumped by 2.5% to $109.96 on August 4, the day the company declared its 2Q15 earnings. CVS’ performance in its higher-margin Retail Pharmacy segment was disappointing.

CVS Health’s Retail Pharmacy segment reported sales of $17.2 billion in 2Q15, an increase of 2.2% over 2Q14. CVS boosted its share of the retail pharmacy market to 21.6% in 1Q15, from 21% in 2Q14.

CVS Health’s (CVS) profitability is falling. Its gross margins have been on the decline, partly due to a shift in the sales mix in its Pharmacy Services segment.

CVS Health (CVS) expects Retail Pharmacy sales growth between 0.5% and 2% year-over-year in 2Q15. Total same-store sales are expected to be in the range of -1.25% to 0.25%.

CVS Health has been aggressively expanding, announcing its intention to acquire long-term care provider Omnicare in May for $12.7 billion in an all-cash deal.

Target’s customer traffic has been pressured in the last two years, partly due to the data breach in 2013. Plus, the number of transactions has been declining.

Eddie Lampert, chairman and CEO of Sears Holdings, has made it clear that he intends to create value through monetizing the company’s real estate assets.