Sam Boughedda

After Friday’s events, shares of Rite Aid Corporation in Investing.com (NYSE:) rose on Friday Thursday: The stock fell 17% This drugstore chain was downgraded from Deutsche Bank (DE:) with a JPMorgan price target decrease (NYSE:). 

Rite Aid shares closed the session 7.44% better on Friday.

Lisa Gill, JPMorgan Analyst, lowered the Rite-Aid share price target to $7 instead of $14. She maintained an underweight rating.

Gill stated to investors that they believe the retail pharmacy business is in a good position over the longer term. However, the near-term outlook remains challenging due to continuing reimbursement pressures and less ability to offset them.

JPMorgan believes Rite Aid will face many industry headwinds. 

An analyst pointed out that Covid-19 could cause significant headwinds in the near term, such as lower OTC and acute scripts. [over-the-counter]Retail pharmacy profits will be affected by lower sales of flu/cold medicines in the short term.

Gill stated that “we believe a discount would be justified given Rite Aid’s continuing turnaround” and the high leverage.