Rite Aid's price per share continues to fall after the Camp Hill, Pa.-based pharmacy retailer and Deerfield, Ill.-based Walgreens Boots Alliance filed their merger proxy statements with the Securities and Exchange Commission last week, according to StreetInsider.com.
Following the release of the proxy statements, Deutsche Bank maintained a hold rating on Rite Aid and lowered its market price to a range of $6.50 per share to $7.00 per share, the value outlined in the companies' amended merger agreement, according to StreetInsider.com. The organizations had previously agreed to a $9.00 per share price.
"Using Rite Aid's internal [fiscal year 2018] projection for [a] EBITDA of $1.045 billion and an EV/EBITDA multiple of 8.0x, we estimate a standalone valuation per share of $2.24 for RAD shares. The 8x multiple is a modest discount to retail pharmacy multiples given their challenging market position," said StreetInsider.com analyst George Hill. "We believe this lower-than-expected standalone valuation is weighing on shares today, as the downside risk on a deal break appears larger than previously forecast."
Rite Aid's stock was valued at $5.45 per share at market close Monday, according to the report.