UPDATE: Imperial Capital Re-Initiates Coverage on Rite Aid Corporation with Outperform Rating, $6.50 PT on Improved Execution with Further Upside Ahead

In a report published Thursday, Imperial Capital analyst Lee J. Giordano re-initiated coverage on Rite Aid Corporation RAD with an Outperform rating and $6.50 price target. In the report, Imperial Capital noted, “We are re-initiating coverage of Rite Aid Corporation with an Outperform rating and one-year price target of $6.50, approximately 27% above the recent share price. Following a period of lackluster results, we now find Rite Aid in the midst of a successful multi-year turnaround strategy with opportunity for further gains in the years ahead, in our view. Management had engineered an improvement in cash flow and profitability over the past few years, which is likely to continue as older stores are remodeled, loyalty programs expand, and operational efficiencies take hold. While the stock had performed exceptionally well of late, we believe there is room for additional upside as Rite Aid's management team successfully executes a favorable long-term strategy coinciding with demographic tailwinds surrounding the drugstore industry.” Rite Aid Corporation closed on Wednesday at $5.10.