NEW YORK (TheStreet) -- Shares of Rite Aid (RAD) are gaining by 2.66% to $8.87 in Thursday's pre-market trading session after analysts at Credit Suisse today reinstated their coverage of the drugstore chain.
The firm issued an "outperform" rating and a price target of $10 as the company has made good progress on its turnaround. Analysts expect further improvement as management pushes forward with numerous traffic-focused initiatives.
The recent acquisition of EnvisionRX for $2 billion enhances the company's outlook, according to the analyst note.
"We continue to believe the industry is poised for more consolidation with leading players on the prowl, and see RAD as one of the most likely targets," analysts added.
Separately, TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate RITE AID CORP (RAD) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: