Why Rite Aid's Shares Jumped 15.3% on Tuesday
Shares of drugstore company Rite Aid (NYSE: RAD) jumped 16.3% on Tuesday. The stock closed on Monday at $4.11. It opened on Tuesday at the same price before shooting to a high of $5.09 shortly after noon. It fell a little at the close to $4.74. The stock has a 52-week low of $3.84 and a 52-week high of $15.65 and is down more than 67% so far this year.
Despite Rite Aid's current woes, investors jumped in to buy its stock the same day that President Joe Biden got his COVID-19 booster shot and encouraged Americans to do the same. This is considered good news for drugstore stocks in general as it will likely increase foot traffic at stores. Rite Aid may be seen as a bargain with a potential to turn things around, though even the company has said it doesn't expect to be cash-flow positive until next year.
In the second quarter of its 2023 fiscal year, Rite Aid had declines in nearly every category. Revenue was reported as $5.9 billion, down 3%, year over year, while the company reported a net loss of $331 million, or an earnings per share (EPS) loss of $6.07 compared to a net loss of $100 million and an EPS loss of $1.86 in the same period last year. It is the seventh consecutive quarter that Rite Aid has lost money.
Source Fool.com
