Cramer’s been behind Rite Aid since last July. The stock has climbed more than 50% over the past 11 months, and it just made a key move today with its $4 billion cash-and-stock deal with Jean Coutu, owner of Eckard and Brooks pharmacies. The agreement will add more than 1,850 stores to RAD’s base.

“Rite Aid looks ready to join the big leagues,” Cramer says.

He thinks Wall Street is underestimating the company’s ability to synergize and cut costs after such a big acquisition. Speaking to CEO Mary Sammons by phone today only reaffirmed his position.

“The only synergies we put out there are the ones we’re highly confident in getting,” Sammons says, “and we believe there are even greater margin and revenue opportunities not included in our forecast.”

Increased productivity, more front-end sales and improved operations should offer a “tremendous amount of opportunity to generate a lot more free cash flow,” the newly anointed chairman says.

Cramer still has a few concerns, though, such as RAD’s 9% bond. If he’s uncomfortable with such a high rate on consumer credit cards, why isn’t Sammons worried?

“If you really think about our debt, we’ve really shown that we can manage it,” Sammons says. “In the last seven years, we’re reduced it by 50%, and even with the new debt we took on to complete the acquisition, our debt ratio’s going to return to levels below today by March of 2009. We’re a healthier, stronger, bigger company.”

“That’s really the key to drug-store sales,” she says.

“This is and remains a great story,” Cramer says. He recommends buyers use limits because it’s very liquid, but he thinks it’s going to $8 or $9.

Questions? Comments?