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Investing.com — Rite Aid Corporation (NYSE:RAD) stock is trading 26% lower Thursday after Deutsche Bank analyst George Hill downgraded the stock to Sell from Hold, slashing its price target to $1 from $16.
The downgrade comes ahead of the company’s fourth-quarter results, which are due April 14.
The analyst said Covid has “hastened the decline” of the company’s retail pharmacy segment, and he sees a potentially “dramatic negative inflection point” for the stock.
Hill added that the company’s preliminary fiscal 2023 outlook “seems to be unattainable.”
The key focus for investors will be Rite Aid’s guidance for 2023, with the company previously stating it could generate over $430 million in EBITDA.
However, he states that if the number comes in “below $400mm, the equity arguably has no value as the company is not in a position to generate real returns to shareholders.”
