Will Rite Aid (RAD) stock soar in 2020 from its yearly high?

Rite Aid Corporation (NYSE: RAD) stock soared to a yearly high of $20.38 on Friday as investors were positive about the company’s future. The shares have risen over 47% in the past year and over 178% in the past three months. The stock, which rebounded after better-than-expected third-quarter 2020 earnings, is trading down on Monday.

The market experts believe that the company’s new strategy, which includes investments in its pharmacy benefit manager, is likely to show a turnaround in the coming months. Despite facing competition for prescription drugs, Rite Aid is likely to show outperformance in the future as the outlook is improving.

The company has tremendous opportunity for a turnaround arising from the significant challenges in the near term. This includes its plan to invest in the expansion and integration of EnvisionRxOptions. The company continues to tackle the challenges and is equally bullish on the unique capabilities that it offers through EnvisionRxOptions.

The company’s turnaround plan gained traction from its encouraging third-quarter earnings results as well as the strong comparable-store sales growth. Also, better customer engagement and brand loyalty will be driven by Rite Aid’s plan to free up pharmacists’ time for more meaningful interactions with customers.

For the third quarter, the pharmacy retailer reported a profit compared to a loss last year, backed by lower costs and expenses as well as gain on debt retirements. For fiscal 2020, the company sees net sales of $21.5-21.9 billion, same-store sales growth of 0-1%, and adjusted earnings of $0.13-0.55 per share.

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The company believes that Thrifty Ice Cream, which was a meaningful contributor, will continue to contribute more with its recently expanded 900 additional stores. Rite Aid expects to modernize its digital and omnichannel consumer engagement infrastructure as the marketing strategy undergoes a dramatic change.

Also, Rite Aid expects to introduce self-checkout at 200 additional stores during the first half of the calendar 2020 as this provides customers with enhanced checkout experience. Also, this could help the company to tackle the increased customer accounts and expenses leverage. The stock is likely to rise in 2020 backed by strong comps growth and better performance of its earnings results.

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