The Camp Hill, Pennsylvania-based company announced the cancellation of its merger agreement with Albertson's late last night in a statement from CEO John Standley.
In response to the surprise shareholder pushback that crushed the deal, the company board will asses "governance changes at the company," suggesting more uncertainty ahead as the company carries on without Albertsons.
Albertsons is a privately held company whose majority owner is a private-equity firm Cerberus Capital Management LP.
RBC analyst George Hill issued a market perform rating for Rite Aid, but expressed pessimism about the prospects of Rite Aid as a standalone company.
"Our outlook for standalone RAD is less than optimistic given a challenging industry backdrop. In our view, the company remains subscale in the retail pharmacy business, where scale is crucially important," he wrote.
RBC's target price stands at $2, with a range from $1 to $3.
Loop Capital managing director Andrew Wolf cited Institutional Shareholder Services Inc. and GlassLewis as two vocal opponents that ultimately helped quash the deal in a note on August 9.
Despite the turmoil, Wolf issued a hold rating for the stock.
"While we believed in the merits of the combination with Albertsons, we have heard the views expressed by our stockholders and are committed to moving forward and executing our strategic plan as a standalone company," CEO John Standley said in a company statement regarding the deal's collapse.
TheStreet's Stocks Under 10 model portfolio was not so forgiving, indicating an exit from their position in Rite Aid.
"The decision to not to merge with Albertsons removes potential cost synergies as well as the competitive moat that would have helped insulate Rite Aid's business from this coming threat," Christopher Versace wrote in a note to Stocks Under 10 subscribers.
The expected selloff in Rite Aid shares comes just days after the stock declined significantly on news that the company's generic drug purchasing efficiencies would be revised down.