Rite Aid Corporation (NYSE: RAD) has announced that it will release its fiscal Q3 2022 earnings on Tuesday, December 21, 2021, before the market open.
What to look for
The company is expected to beat revenue estimates, but earnings are likely to come short. Rite Aid Corp continued to show improvement in Q2 in its underlying business with record quarterly results exceeding expectations. The results were driven by the strong execution of the vaccine administration, the benefits of work to revitalize digital and retail experiences, and enhanced profitability at elixir. These trends are expected to continue when the company releases Q3 2022 results.
Earnings: Stockearning’s Estimated EPS for the fiscal Q3 2022 is expected to be a loss of $0.18 per share, representing a YoY decline of 145% in earnings. The company reported an adjusted net loss of $22 million or $0.41 loss per share in the second quarter. Historical EPS Performance for the past 12 quarters shows that the company has beat estimates ten times (83%) and missed predictions twice (16%).
Revenue: For the quarter under review, the company is expecting revenue of $6.28 billion, a 2.7% YoY increase. In the second quarter of 2021, the company had revenue of $6.113 billion relative to $5.982 billion a year ago. In addition, the company anticipates increased COVID-19 vaccines and testing demand, and as a result, it raised the fiscal 2022 adjusted EBITDA outlook. As a result, the company anticipates revenue of $25.1 billion to $25.5 billion, with net loss expected to be $221 million to $197 million.
Stock movement: Since the last earnings release, RAD shares have lost 19.8%. After the earnings release, Rite Aid shares have been DOWN 27 times in the last 46 quarters. So, the historical price reaction suggests a 58% probability of the share price going DOWN once Rite Aid reports its fiscal Q3 2022 quarterly earnings. According to the Stockearning algorithm, the predicted first-day move is 8%, while the predicted move on the seventh day is 12%.
What analysts are saying
Deutsche Bank analyst George Hill has raised the stock's price from $13 to $15 but maintained a "Hold" rating on the stock after its Q2 earnings release. Hill believes demand for tests, vaccines, and boosters will be strong for the rest of the year, which the analyst notes are "nicely margin accretive" for the company.
Recently JPMorgan analyst Lisa Gill downgraded the stock from "Hold" to "Sell" and lowered the price target from $21 to $12 per share. The analyst noted at the time that while Rite Aid's Adjusted EBITDA in the first quarter beat consensus estimates on vaccine tailwinds, that tailwind is subsiding, and prior fiscal 2022 guidance was below expectations. Gill told investors that the miss resulted from the pandemic's headwinds, including weak over-the-counter cough, flue, and cold sales, and low acute scripts.
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