As Rite Aid (RAD) continues its precipitous decline, Credit Suisse has decided they’ve seen enough. The bank is pulling the plug on their support:
RAD has been an extremely frustrating stock, as the combination of mismanagement and difficult industry conditions have resulted in disappointing sales and earnings over the last few quarters. While the stock is at a 10-year low and liquidity is not a near-term issue, we are increasingly concerned about the company’s ability to manage through the challenging economic/drug retailing landscape, guidance looks aggressive, and the stock is still not cheap. While we are not proud of downgrading the stock at $1.35, keep in mind that it still has a $1.1 billion equity value.
Lehman, meanwhile, still sees the troubled stock more than doubling…to $4.
Credit Suisse downgraded Rite Aid (RAD) from Outperform to NEUTRAL, target price of $2.