What happened

Shares of Rite Aid (NYSE:RAD) were climbing last month as the company announced a rebranding plan and benefited from vaccine news, as the company is poised to be a major destination for Americans to get the coronavirus vaccine. That news was enough to overcome headwinds around the launch of Amazon Pharmacy, and the stock finished the month up 44%, according to data from S&P Global Market Intelligence.

RAD Chart

RAD data by YCharts

So what

Rite Aid stock jumped sharply to kick off November; the stock rose along with its larger pharmacy peers, CVS Health and Walgreens Boots Alliance, as investors in the sector responded warmly to President-elect Joe Biden's victory. Biden, who supports the Affordable Care Act, is seen as being more favorable to healthcare stocks like Rite Aid, as more and better insurance coverage for Americans helps encourage more spending on prescription drugs.

A rebranded Rite Aid store

Image source: Rite Aid.

The following week, the stock climbed again in response to Pfizer's successful coronavirus vaccine trials. A coronavirus vaccine is likely to drive traffic to Rite Aid locations, which already handle COVID-19 testing and provide urgent care. The company also announced a store rebranding program that includes a new logo, modernized store remodels, whole health merchandise, and an improved digital experience.

In the third week of November, Rite Aid tumbled on the Amazon news, which is perceived as a threat to the broad pharmacy industry. However, the stock then recovered losses in the final week of the month as it said it would expand free COVID-19 testing and offer the coronavirus vaccine for free.

Now what

Rite Aid has long been a laggard in the industry, but its rebranding program looks promising and is long overdue. Meanwhile, the other news last month, such as the incoming Biden administration and the anticipated coronavirus vaccine, should also provide tailwinds for Rite Aid. The stock still trades at a significant discount to its peers and could keep climbing if it shows traction in its rebranding strategy. Look for the company's third-quarter earnings report on Dec. 17. Analysts expect revenue to increase 6.9% to $5.84 billion, but see an adjusted loss of $0.05 per share on the bottom line, compared to a $0.54 profit a year ago.

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