On the eve of the Rite Aid (RAD) tallying votes for its merger with Albertsons, the drug store scuttled the deal. The news, along with downgrades and warnings from Moody’s, sent the stock down nearly 20 percent on the week. Is the selling overdone?

These bearish reports against Rite Aid do not recognize that the future value on the RAD-Albertsons firm would have been worth even less. The combined firms would have had competition from multiple fronts: from supermarkets like Walmart (WMT) and Kroger (KR) to drug stores like Walgreens (WBA) andAmazon.com (AMZN), through the latter’s online ambitions. Now that Rite Aid is on its own again, what will it take for the stock to get to my fair value of $2.00 a share, a forecast that assumed shareholders would reject the deal.

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